Wednesday Watch

Night Trading 

• Asian equity indices are -.25%. to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 83.25 unch.

• China Sovereign CDS 36.5 unch.
  

• Bloomberg Emerging Markets Currency Index 61.71 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,372.0 -37.0 points.
• Volatility Index(VIX) futures 20.20 -.16%.
• FTSE 100 futures +.04%.

• S&P 500 futures +.04%.

• NASDAQ 100 futures +.12%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BF/B)/.33
• (CPB)/.66
• (UNFI)/.92
• (VRA)/-.19
  

After the Close:

• (GME)/-.84
• (OXM)/1.06
• (RH)/4.12
• (VRNT)/.36
  

Economic Releases

10:00 am EST

• Wholesale Trade Sales MoM for April.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,892,000 barrels versus a -5,079,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +820,560 barrels versus a +1,499,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,450,780 barrels versus a +3,720,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.61% versus a +1.7% gain prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Balance of Trade report, $38B 10Y T-Note auction, weekly MBA Mortgage Applications report, Deutsche Bank Basic Materials Conference and the BofA Tech Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Reversing Higher into Final Hour on Lower Long-Term Rates, Oil Gain, Short-Covering, Commodity/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.7 +1.6%
• Bloomberg Global Risk On/Risk Off Index 3,413.0 -110.0 points

• Euro/Yen Carry Return Index 137.8 +.12%

• Emerging Markets Currency Volatility(VXY) 8.6 -1.3%

• S&P 500 Implied Correlation 48.0 -4.1%

• ISE Sentiment Index 137.0  +18.0 points
  

• Total Put/Call .63 -7.4%

• NYSE Arms 1.4 +8.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.31 +.08%
  

• US Energy High-Yield OAS 413.03 -.44%

• European Financial Sector CDS Index 57.24 -.30%

• Italian/German 10Y Yld Spread 109.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 83.19 -.66%
  

• Emerging Market CDS Index 153.57 -2.3%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.37 +.38%

• 2-Year Swap Spread 7.0 -.25 basis point

• TED Spread 11.75 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  68.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 74.5 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.70 +.04%
• 3-Month T-Bill Yield .02% unch.
  

• Yield Curve 141.0 -1.0 basis point
  

• China Iron Ore Spot 203.0 USD/Metric Tonne +6.6%

• Citi US Economic Surprise Index 13.6 +.6 point

• Citi Eurozone Economic Surprise Index 130.5 -9.8 points
  

• Citi Emerging Markets Economic Surprise Index 63.10 +3.0 points

• 10-Year TIPS Spread 2.38 -3.0 basis points
• 95.0% chance of no change at Sept. 22nd meeting, 95.0% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +51 open in Japan 
• China A50 Futures: Indicating -65 open in China

• DAX Futures: Indicating +33 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Value +.1%

Sector Underperformers:

• 1) Gold & Silver -1.0% 2) Paper -1.0% 3) Utilities -.7%

Stocks Falling on Unusual Volume: 

• HARP, REVG, ATHA, KDP, CMS, LESL, DM, COUP, LBRT, ACRS and HOOK
  

Stocks With Unusual Put Option Activity:

• 1) COUP 2) SFIX 3) EWJ 4) APO 5) CLNE
  

Stocks With Most Negative News Mentions:

• 1) CAN 2) TR 3) HARP 4) SAIC 5) HZAC
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.1%

Sector Outperformers:

• 1) Steel +2.6% 2) Alt Energy +2.4% 3) Retail +1.7%

Stocks Rising on Unusual Volume:

• CLOV, GOEV, VLDR, WKHS, WEN, NAPA, FUV, RIDE, SFIX, HYLN, EXPI, APPN, AEVA, GPRO, SLQT, BBBY, HA, MILE, PLAY, RDNT, MP, GNRC, PETS, ROOT, GME, SPCE, REV, FSLY, EAT, HOL, OPEN, NKLA, RHP, AI, FCEL, CSPR, DSP, MRVL, SVC, CLNC, SHAK, BIG, SYNG, ETWO, MSP, PZZA, OSUR, NESR, ASAN and ASO
  

Stocks With Unusual Call Option Activity:

• 1) WEN 2) DISCK 3) COUP 4) SFIX 5) BIIB

Stocks With Most Positive News Mentions:

• 1) SFIX 2) WEN 3) CLOV 4) NEXT 5) TELL
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -.4% Below 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 59.6% of Issues Advancing, 35.9% Declining
• 328 New 52-Week Highs, 9 New Lows
• 88.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.5%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,429.0 -95.0 points
• Vix 16.5 +.7%
• Total Put/Call .64 -5.9%
• TRIN/Arms 1.28 +.8%

Tuesday Watch

Evening Headlines

Bloomberg:        

• China Bond-Selloff Fears Grow as Liquidity Begins to Tighten.
• Japan’s GDP Shrinks Less Than First Reported Amid Emergency.  
• Yen Down 6% Against Dollar Sits Out Global Recovery Trade.  
• U.K. Consumers Splashed the Cash as Lockdown Rules Eased.
• Despite Danger and Cost, Japan Gambles on Successful Olympics.
• Canada Set to Relax Quarantine Rules for Vaccinated Travelers.  
• Asia Reflation Momentum Puts Commodities, Shipping Stocks on Top.
• Asian Stocks Steady, U.S. Equity Futures Advance: Markets Wrap.
• Top Copper Nation Calls for Debate on How to Best Tap the Boom.  
• Oil Edges Lower With Rally Cooling After Bouncing Off 2018 High.  
• Five Things You Need to Know to Start Your Day.
• Mass Consolidation Turns Food, Energy Firms Into Hacking Targets.  
• Hackers Breached Colonial Pipeline Using Compromised Password.
• Biotech Shares Climb as Biogen Approval Stokes Optimism.  
• Tesla Executive and Top Musk Lieutenant Has Left the Company.  
• Biden Talks With GOP Stall as Bipartisan Group Plans Alternative.  
• Real Estate ETFs Emerging as a Bet on Global Supply-Chain Mess.

Wall Street Journal:

• FDA Approves First Alzheimer’s Drug in Nearly Two Decades.
• The Fed’s Risky Fill-the-Punch-Bowl Strategy.
• America’s Covid Groupthink Functioned Like China’s Repression.
• An Alzheimer’s Breakthrough, At Last.
• Options Traders Bet on Return of $100 Oil.
• Commodity Price Surges Add to Inflation Fears.
• U.S. Report Found It Plausible Covid-19 Leaked From Wuhan Lab.
  

Fox News:

• Bill Gates' divorce could expose affairs, inappropriate behavior covered up by NDAs: report.
• Harris mocked for passing out treats in shape of her faceless head to reporters.
  

CNBC.com:

• Apple is turning privacy into a business advantage, not just a marketing slogan.
• China’s cautious new graduates flock to state-backed jobs.
• Airport security company CLEAR files to go public as post-pandemic travel picks up.
• Stitch Fix shares soar as sales top estimates, styling service raises full-year outlook.
• Biogen shares surge 38% after FDA OKs Alzheimer’s drug, first new therapy for the disease in 18 years.

MarketWatch.com:    

• As AMC stock surges, SEC says it’s watching memes for ‘disruptions of the market, manipulative trading, or other misconduct’.  
• Bitcoin faces fresh scrutiny as police call for new powers to freeze crypto assets in the U.K.

Zero Hedge: 

• "Do Not Come": Kamala Goes Full Trump, Tells Guatemalans To Stay Away.
• Blinken Says Biden Will Put "Future Cyberattacks" Front & Center In Putin Summit.
• Malaysian Police Use Heat Drones To Check People's Temperatures From Above.
• "You're Emotionally And Mentally Abusing Children": Mom Goes Nuclear On School Board Over CRT, BLM 'Indoctrination'.
• Trump Planned To Haul Fauci, Daszak In Front Of US Presidential Commission, Demand China Reparations.
• China Will Use "Coercive Power" To Force Digital Yuan On Population.
• The Mysterious $85 Billion Surge In China's FX Reverse Repo.
• Consumer Credit Hits New Record Despite Unexpected Decline In Credit Card Usage.
• "Let's Find A Person We Can Trust": House GOP Leader Says Fauci Needs To Go.
• Crypto Just Crashed: Is The DoJ Dumping Their 'Recovered' Ransoms?
• Pornstar Goes Viral After Using Ben Graham's 'Investing Bible' To Promote New Sh*tcoin.
• Biotechs Burst Higher But Bonds, Bitcoin, & The Buck Breakdown.

Newsmax:

• Iran Weeks Away From Nuclear 'Breakout' as Biden Team Mired in Confusion.
  

TheGatewayPundit.com:

• UPDATE on Arizona Audit: Georgia Team Is Coming Tomorrow – OAN Reporter Christina Bobb Says More States May Be Coming.
• Psaki Gives Nonsensical Answer When Asked Why Joe Biden Failed to Mention D-Day on its 77th Anniversary (VIDEO).
• Republicans Flip Mayorship of McAllen, Texas – Major Border Town with 85% Hispanic Population.
• John Fredericks: It Wasn’t Just the Governor – Kemp’s Wife Was Booed on Stage at Georgia Convention, Too.

The Epoch Times: 

•  ‘Enough Is Enough’: DeSantis Signs Bills to Confront ‘Nefarious’ Chinese Influence.

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 83.25 -1.75 basis points.

• China Sovereign CDS 36.5 unch.
  

• Bloomberg Emerging Markets Currency Index 61.68 unch.
• Bloomberg Global Risk-On/Risk Off Index 3,494.0 -28.0 points.
• Volatility Index(VIX) futures 19.95 -.26%.
• FTSE 100 futures +.12%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.27%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ASO)/.83
•  (NAV)/.44
• (THO)/2.27
  

After the Close:

• (ABM)/.71
• (CASY)/.86
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for May is estimated to rise to 101.0 versus 99.8 in April.
  

8:30 am EST:

• The Trade Balance report for April is estimated at -$68.7B versus -$74.4B in March.

10:00 am EST

• JOLTS Job Openings for April is estimated to rise to 8200K versus 8123K in March.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The France Balance of Trade report, $58B 3Y T-Note auction, weekly US retail sales report, BofA Tech Conference, Credit Suisse Energy Conference, Goldman Sachs Healthcare Conference, JPMorgan Consumer/Retail/Luxury Conference, UBS Industrials/Transports Conference and the Baird Consumer/Tech/Services Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by consumer and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.