Stocks Higher into Afternoon on Stable Long-Term Rates, Oil Bounce, Short-Covering, Retail/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.1 -7.1%
• Bloomberg Global Risk On/Risk Off Index 2,948.0 -24.0 points

• Euro/Yen Carry Return Index 134.15 -.07%

• Emerging Markets Currency Volatility(VXY) 10.3 +.2%

• S&P 500 Implied Correlation 51.2 -1.4%

• ISE Sentiment Index 126.0 +4.0 point
  

• Total Put/Call .83 +13.7%

• NYSE Arms .86 +24.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.55 -1.4%
  

• US Energy High-Yield OAS 493.36 +.27%

• European Financial Sector CDS Index 57.03 +1.4%

• Italian/German 10Y Yld Spread 96.5 -.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 58.75 -.35%
  

• Emerging Market CDS Index 181.06 -3.6%
  

• iBoxx Offshore RMB China Corporate High Yield Index 188.47 +.02%

• 2-Year Swap Spread 10.75 +.5 basis point

• TED Spread 19.25 +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.75 +.75 basis point
  
• MBS  5/10 Treasury Spread  80.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 74.5 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.94 +.44%
• 3-Month T-Bill Yield .00% -1.0 basis point
  

• Yield Curve 155.0 +1.0 basis point
  

• China Iron Ore Spot 148.80 USD/Metric Tonne -7.3%

• Citi US Economic Surprise Index 41.0 unch.

• Citi Eurozone Economic Surprise Index 89.4 -.6 point
  

• Citi Emerging Markets Economic Surprise Index 33.9 -1.0 point

• 10-Year TIPS Spread 2.31 unch.
• 100.0% chance of no change at June 16th meeting, 100.0% chance of no change at Sept. 22nd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -472 open in Japan 
• China A50 Futures: Indicating +28 open in China

• DAX Futures: Indicating +32 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Value -.1%

Sector Underperformers:

• 1) Insurance -1.1% 2) Road & Rail -1.0% 3) Banks -1.0%

Stocks Falling on Unusual Volume: 

• FLXN, BHVN, CRS, TRV, SCHN, SUMO, NKE, TBIO, V, NRIX, PFSI, FCFS, HT, SOI, ELAN, HIMS, ROAD, SKLZ, RAVN and AFIB
  

Stocks With Unusual Put Option Activity:

• 1) CLVS 2) WSM 3) FITB 4) FE 5) NKE
  

Stocks With Most Negative News Mentions:

• 1) IDRA 2) V 3) AFIB 4) PFSI 5) HLI
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.5%

Sector Outperformers:

• 1) Alt Energy +2.4% 2) Gaming +2.1% 3) Retail +1.9%

Stocks Rising on Unusual Volume:

• VUZI, ALEC, ROOT, LC, URGN, SGMO, WSM, STEP, NAVI, PARR, FDX, CNX, VCEL, RXT, DG, SJI, MODN, BCEL and PLAB
  

Stocks With Unusual Call Option Activity:

• 1) CLVS 2) PARR 3) MRKR 4) LEAF 5) FDX

Stocks With Most Positive News Mentions:

• 1) FDX 2) CLVS 3) WOOF 4) DG 5) PODD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +19.5% Above 100-Day Average 
• 4 Sectors Rising, 7 Sectors Declining
• 40.0% of Issues Advancing, 56.7% Declining
• 49 New 52-Week Highs, 26 New Lows
• 87.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.3%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,815.0 -127.0 points
• Vix 21.8 +.9%
• Total Put/Call .81 +11.0%
• TRIN/Arms 1.08 +56.5%

Friday Watch

Night Trading

• Asian equity indices are -1.25% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 59.75 +.5 basis point.

• China Sovereign CDS 30.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 61.61 -.08%.
• Bloomberg Global Risk-On/Risk Off Index 2,960.0 -12.0 points.
• Volatility Index(VIX) futures 23.9 -1.44%.
• FTSE 100 futures n/a

• S&P 500 futures +.24%.

• NASDAQ 100 futures +.25%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• None of note
  

Economic Releases

• None of note
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German PPI report and the (UEIC) could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by technology and energy 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 Reversing Lower into Final Hour on Higher Long-Term Rates, Oil Plunge, Global Shutdown Worries, Energy/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.7 +2.7%
• Bloomberg Global Risk On/Risk Off Index 3,142.0 +130.0 points

• Euro/Yen Carry Return Index 134.46 -.31%

• Emerging Markets Currency Volatility(VXY) 10.4 +.5%

• S&P 500 Implied Correlation 51.5 +3.1%

• ISE Sentiment Index 122.0 +24.0 point
  

• Total Put/Call .65 -11.0%

• NYSE Arms .60 +13.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.46 +.94%
  

• US Energy High-Yield OAS 484.22 +.95%

• European Financial Sector CDS Index 56.18 -.2%

• Italian/German 10Y Yld Spread 96.75 +1.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 59.0 -1.6%
  

• Emerging Market CDS Index 184.95 +2.3%
  

• iBoxx Offshore RMB China Corporate High Yield Index 188.41 +.73%

• 2-Year Swap Spread 10.25 -1.0 basis point

• TED Spread 18.5 +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +.5 basis point
  
• MBS  5/10 Treasury Spread  79.0 +1.5 basis points
  
• IHS Markit CMBX BBB- 6 74.5 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.72 +.29%
• 3-Month T-Bill Yield .01% unch.
  

• Yield Curve 154.0 +7.0 basis points
  

• China Iron Ore Spot 161.50 USD/Metric Tonne +1.3%

• Citi US Economic Surprise Index 41.0 +9.7 points

• Citi Eurozone Economic Surprise Index 90.0 -.6 point
  

• Citi Emerging Markets Economic Surprise Index 34.9 +.1 point

• 10-Year TIPS Spread 2.31 unch.
• 100.0% chance of no change at June 16th meeting, 100.0% chance of no change at Sept. 22nd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -236 open in Japan 
• China A50 Futures: Indicating -204 open in China

• DAX Futures: Indicating -14 open in Germany

Portfolio:

• Lower: On losses in my biotech/tech/energy sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 50% Net Long