Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 83.25 +.5 basis point.

• China Sovereign CDS 36.0 +.5 basis point.
  

• Bloomberg Emerging Markets Currency Index 61.43 unch.
• Bloomberg Global Risk-On/Risk Off Index 3,346.0 -12.0 points.
• Volatility Index(VIX) futures 19.30 -1.35%.
• FTSE 100 futures +.29%.

• S&P 500 futures +.03%.

• NASDAQ 100 futures +.06%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• (JEF)/.95
• (LEN)/2.38
  

Economic Releases

8:30 am EST

• Building Permits MoM for May is estimated to fall -.2% versus a +.3% gain in April.
• Housing Starts for May is estimated to rise to 1630K versus 1569K in April.
• The Import Price Index MoM for May is estimated to rise +.8% versus a +.7% gain in April.
• The Import Price Index Ex Petrol for  May is estimated to rise +.5% versus a +.7% gain in April.
• The Export Price Index MoM for May is estimated to rise +.8% versus a +.8% gain in April.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,686,820 barrels versus a -5,241,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -14,550 barrels versus a +7,046,000 gain the prior week. Distillate inventories are estimated to rise by +843,000 barrels versus a +4,412,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise +.24% versus a +2.6% gain prior.

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 0.00-.25%.
  

Upcoming Splits

• (TTD) 10-for-1
  

Other Potential Market Movers

• The FOMC press conference, China Industrial Production report, weekly MBA Mortgage Applications report, Deutsche Bank Auto Industry Conference, JMP Life Sciences 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 industrial and energy shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

Stocks Lower into Afternoon on Fed Taper Fears, Inflation Concerns, Valuation Worries, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.0 +3.7%
• Bloomberg Global Risk On/Risk Off Index 3,344.0 -14.0 points

• Euro/Yen Carry Return Index 137.90 +.05%

• Emerging Markets Currency Volatility(VXY) 8.6 unch.

• S&P 500 Implied Correlation 47.0 -1.2%

• ISE Sentiment Index 152.0  +21.0 points
  

• Total Put/Call .68 -4.2%

• NYSE Arms 1.23 -18.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 48.9 +.61%
  

• US Energy High-Yield OAS 325.11 -.10%

• European Financial Sector CDS Index 55.11 +.09%

• Italian/German 10Y Yld Spread 102.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 82.93 +.05%
  

• Emerging Market CDS Index 152.90 +1.31%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.15 unch.

• 2-Year Swap Spread 7.75 +1.0 basis point

• TED Spread 10.75 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 -.25 basis point
  
• MBS  5/10 Treasury Spread  70.75 +1.75 basis points
  
• IHS Markit CMBX BBB- 6 74.75 -.5 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.36 -.46%
• 3-Month T-Bill Yield .01% -1.0 basis point
  

• Yield Curve 133.0 +1.0 basis point
  

• China Iron Ore Spot 209.50 USD/Metric Tonne -.8%

• Citi US Economic Surprise Index 50.0 -6.6 points

• Citi Eurozone Economic Surprise Index 122.60 -2.8 points
  

• Citi Emerging Markets Economic Surprise Index 86.3 -.7 point

• 10-Year TIPS Spread 2.39 +1.0 basis point
• 93.0% chance of no change at Sept. 22nd meeting, 93.0% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -71 open in Japan 
• China A50 Futures: Indicating -145 open in China

• DAX Futures: Indicating +15 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long
  

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -15.6% Below 100-Day Average 
• 4 Sectors Rising, 7 Sectors Declining
• 32.1% of Issues Advancing, 62.5% Declining
• 134 New 52-Week Highs, 12 New Lows
• 88.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.8%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,339.0 -18.0 points
• Vix 17.2 +5.0%
• Total Put/Call .69 -2.8%
• TRIN/Arms 1.14 -24.0%

Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 82.75 unch.

• China Sovereign CDS 35.5 unch.
  

• Bloomberg Emerging Markets Currency Index 61.63 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,345.0 -11.0 points.
• Volatility Index(VIX) futures 18.95 -.66%.
• FTSE 100 futures +.23%.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.16%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• (HRB)/5.06
• (LZB)/.74
• (MANU)/.01
• (ORCL)/1.33
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for May is estimated to fall -.7% versus unch. in April.
• Retail Sales Ex Autos MoM for May is estimated to rise +.4% versus a -.8% decline in April.
• Retail Sales Ex Autos and Gas for May is estimated unch. versus a -.8% decline in April.
• Empire Manufacturing for June is estimated to fall to 22.5 versus 24.3 in May.
• PPI Final Demand MoM for May is estimated to rise +.5% versus a +.6% gain in April.
• PPI Ex Food and Energy MoM for May is estimated to rise +.5% versus a +.7% gain in April.
  

9:15 am EST

• Capacity Utilization for May is estimated to rise to 75.1% versus 74.9% in April.
• Industrial Production MoM for May is estimated to rise +.7% versus a +.7% gain in April. 
• Manufacturing Production for May is estimated to rise +.8% versus a +.4% gain in April.
  

10:00 am EST

• Business Inventories for April are estimated to fall -.1% versus a +.3% gain in March.
• The NAHB Housing Market Index for June is estimated at 83 versus 83 in May.

4:00 pm EST

• Net Long-Term TIC Flows for April.

Upcoming Splits

• (TTD) 10-for-1
  

Other Potential Market Movers

• The China Retail Sales report, weekly US retail sales reports, 20Y T-Bond auction, Oppenheimer Consumer Growth/E-Commerce Conference and the (HUM) investor day 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 technology and commodity 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.

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -13.9% Below 100-Day Average 
• 3 Sectors Rising, 8 Sectors Declining
• 41.7% of Issues Advancing, 55.1% Declining
• 230 New 52-Week Highs, 8 New Lows
• 89.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.8%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,314.0 -3.0 points
• Vix 16.7 +7.0%
• Total Put/Call .71 -14.5%
• TRIN/Arms 1.01 -3.8%

Monday Watch

Today's Headlines

Bloomberg:           

• China Tells U.S. to Stop Delaying Removal of Iran Sanctions.
• With Merkel Gone, Canada’s Trudeau Wants to Be ‘Dean’ of G-7.
• The G-7’s 1 Billion Pledge for New Vaccine Doses Comes Up Short.    
• Treasuries Dip With Focus on Fed; Stocks Mixed: Markets Wrap.
• Saudi Stocks Lead Mideast Higher as Oil Extends Gains: Inside EM.
• A Meme Stock Is Born: How to Spot the Next Reddit Favorite.  
• G-7 Drops Aim to Shift New Car Sales Away from Oil By 2030. 
• Out-of-Control Shipping Costs Fire Up Prices From Coffee to Toys.
• Fed Dot Plot Seen Shifting to 2023 Rate Liftoff, Economists Say.
• European Bank Stocks Lead Rally After a Decade of Disappointment.

Wall Street Journal:

• U.S. Workers Are Quitting at Highest Rate in Decades.
• G-7 Leaders Rally to Biden’s Call to Challenge China.
• Positive Covid-19 Tests Fall to Lowest Recorded Rate.
• Why That Sofa You Ordered Isn’t Showing Up Soon.
• Schoolyard Justice in Federal Court.
• Markets Are Leaving Little Room for the Fed to Be Wrong on Inflation.
• National Parks Are Overcrowded and Closing Their Gates.
• Chip Shortage Brings Frustration but More Business to Middlemen. 

Fox News:

• Pro-life advocates sound alarm as Dems push nationwide agenda.

CNBC: 

• Top Wall Street analysts say these stocks are poised to deliver significant gains.
• How bad are global shipping snafus? Home Depot contracted its own container ship as a safeguard.
• GM, Ford are all-in on EVs. Here’s how their dealers feel about it.

Zero Hedge: 

• Reviewing Market Signals As Warnings Increase.
• Invesco Launches 2 "Zero Fee" ETFs As Sponsors Compete To Offer Cheapest Funds.
• Doctor Who Wants Indefinite UK Lockdown Says "Sadly, It Can't Be Forever".
• ​Lumber Prices Record Biggest Weekly Drop Ever As Supply Increases.
• Baltimore City Responds After Dozens Of Businesses Threaten Not To Pay Taxes.
• "It Won't Be Pleasant" - Mark Carney Unveils Dystopian New World To Combat Climate 'Crisis'.
• Visualizing The Biggest Companies In The World In 2021.
• Real Interest Rates Suggest It's A Good Time To Buy And Hold Gold.
• Thor Industries Now Has $14 Billion Order Backlog Amid Booming Demand For RVs.
• Visualizing The History Of US Inflation Over 100 Years.
• Mexican Drug Cartel Unveils "Grupo Elite" Special Forces Unit Hunting Rivals.
• Ford's Electric F-150 Lightning Reservations Pass 100,000.
• Gluten-Free Generation: Children With Celiac Disease Doubles In 25-Years.

MarketWatch.com:   

• Opinion: Momentum in the stock market is building toward a breakout.
  
• Opinion: AMD’s stock has been left behind, but not for long — here’s why.

TheGatewayPundit.com:

• Developing: The Same Suspicious SQL Software Discovered in Michigan Dominion Voting Machines Was Just Found in Pennsylvania Dominion Voting Machines.
• Biden Handlers Realize A Joint Press Conference with Putin Would Be Complete Disaster – Decide on Separate Press Conferences.
• PRESIDENT TRUMP on the Biden Admin’s Attempts To Shut Down Arizona Audit: “They Want It Over With Because They Seem to Know What Will Be Found”.
• BREAKING: Reporter Who Broke Clinton-Lynch Tarmac Story Found DEAD in His Apartment.

The Epoch Times:

• Southern Chinese City Halts Local Flights for 10 Days As Virus Spreads.

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 +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 82.75 -1.0 basis point.
• China Sovereign CDS 35.5 unch.
• Bloomberg Emerging Markets Currency Index 61.71 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 3,3352.0 +34.0 points.
• Volatility Index(VIX) futures 18.80 -.27%. 
• Euro Stoxx 50 futures +.22%.
• S&P 500 futures +.08%.
• NASDAQ 100 futures +.17%

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 Japan Industrial Production report and the Credit Suisse Communications Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by technology 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 75% net long heading into the week.