Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -20.2% Below 100-Day Average 
• 9 Sectors Rising, 2 Sectors Declining
• 60.4% of Issues Advancing, 34.9% Declining
• 138 New 52-Week Highs, 6 New Lows
• 84.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.2%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,382.0 +23.0 points
• Vix 15.8 -3.3%
• Total Put/Call .69 unch.
• TRIN/Arms .75 -21.0%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 84.5 unch.

• China Sovereign CDS 36.0 -.5 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.71 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,348.0 -10.0 points.
• Volatility Index(VIX) futures 18.32 -.66%.
• FTSE 100 futures -.01%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.21%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ACN)/2.24
• (DRI)/1.79
• (FIZZ)/.41
• (RAD)/.22
• (WOR)/1.75
  

After the Close:

• (BB)/-.05
• (FDX)/5.00
• (NKE)/.51
• (PRGS)/.73
• (SNX)/1.93
  

Economic Releases

8:30 am EST

• The Advance Goods Trade Balance for May is estimated at -$87.5B versus -$85.2B in April.
• Retail Inventories MoM for May is estimated to fall -.5% versus a -1.6% decline in April.
• Wholesale Inventories MoM for May is estimated to rise +.8% versus a +.8% gain in April.
• Durable Goods Orders for May is estimated to rise +2.8% versus a -1.3% decline in April.
• Durables Ex Transports for May is estimated to rise +.7% versus a +1.0% gain in April.
• Cap Goods Orders Non-Defense Ex-Air for May is estimated to rise +.6% versus a +2.2% gain in April.
• Initial Jobless Claims for last week are estimated to fall to 380K versus 412K the prior week.
• Continuing Claims is estimated to fall to 3460K versus 3518K prior.
  

11:00 am EST

• The Kansas City Fed Manufacturing Index for June is estimated to fall to 24.0 versus 26.0 in May.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Williams speaking, Fed stress test results, Eurozone GDP report, BofE rate decision, weekly Langer Consumer Comfort Index, (PKI) analyst day, (MSFT) Windows Event, (HIBB) investor day and the (UNFI) investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are slightly lower, weighed down 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 100% net long heading into the day.

Stocks Slightly Higher into Final Hour on Stable Long-Term Rates, Short-Covering, Technical Buying, Alt Energy/Retail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.3 -2.5%
• Bloomberg Global Risk On/Risk Off Index 3,374.0 +17.0 points

• Euro/Yen Carry Return Index 136.89 +.22%

• Emerging Markets Currency Volatility(VXY) 8.9 -.7%

• S&P 500 Implied Correlation 45.9 -1.9%

• ISE Sentiment Index 134.0  +39.0 points
  

• Total Put/Call .7 -14.1%

• NYSE Arms .77 -36.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 48.78 -.43%
  

• US Energy High-Yield OAS 389.50 -1.1%

• European Financial Sector CDS Index 54.0 -.9%

• Italian/German 10Y Yld Spread 107.0 +1.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 84.59 -.54%
  

• Emerging Market CDS Index 155.59 -.69%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.25 +.29%

• 2-Year Swap Spread 6.5 -.5 basis point

• TED Spread 10.0 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 +.75 basis point
  
• MBS  5/10 Treasury Spread  69.25 -3.0 basis points
  
• IHS Markit CMBX BBB- 6 73.25 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.69 +.06%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 122.0 -2.0 basis points
  

• China Iron Ore Spot 208.35 USD/Metric Tonne +2.7%

• Citi US Economic Surprise Index 30.2 -16.0 points

• Citi Eurozone Economic Surprise Index 94.10 +5.0 points
  

• Citi Emerging Markets Economic Surprise Index 76.9 +.4 point

• 10-Year TIPS Spread 2.35 +3.0 basis points
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -104 open in Japan 
• China A50 Futures: Indicating -88 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Afternoon Market Internals

NYSE Composite Index:

• Volume Running -22.8% Below 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 58.6% of Issues Advancing, 37.3% Declining
• 164 New 52-Week Highs, 9 New Lows
• 84.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.5%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,377.0 +20.0 points
• Vix 16.2 -2.5%
• Total Put/Call .67 -14.1%
• TRIN/Arms .76 -37.2%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 84.5 unch.

• China Sovereign CDS 36.5 unch.
  

• Bloomberg Emerging Markets Currency Index 60.64 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 3,333.0 -24.0 points.
• Volatility Index(VIX) futures 18.65 -.94%.
• FTSE 100 futures -.09%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.20%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CCL)/-1.61
• (INFO)/.80
• (PDCO)/.52
• (WGO)/1.77
  

After the Close:

• (FUL)/.92
• (KBH)/1.31
• (SCS)/-.30
  

Economic Releases

8:30 am EST

• The 1Q Current Account Balance is estimated at -$206.2B versus -$188.5B in 4Q.
  

9:45 am EST

• The Markit US Manufacturing PMI for June is estimated to fall to 61.5 versus 62.1 in May.
• The Markit US Services PMI for June is estimated to fall to 70.0 versus 70.4 in May.

10:00 am EST

• New Home Sales for May is estimated to rise to 867K versus 863K in April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bowman speaking, Eurozone PMI report, weekly MBA Mortgage Applications report, Sidoti Investor Conference and the (GSK) investor update 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 healthcare 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 Higher into Final Hour on Stable Long-Term Rates, Less Hawkish Fed Commentary, Short-Covering, Commodity/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.2 -3.9%
• Bloomberg Global Risk On/Risk Off Index 3,317.0 +181.0 points

• Euro/Yen Carry Return Index 136.56 +.54%

• Emerging Markets Currency Volatility(VXY) 8.9 -1.1%

• S&P 500 Implied Correlation 48.2 -.41%

• ISE Sentiment Index 95.0  -15.0 points
  

• Total Put/Call .78 -4.9%

• NYSE Arms .94 +129.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.17 -.95%
  

• US Energy High-Yield OAS 393.32 +.16%

• European Financial Sector CDS Index 54.4 -2.2%

• Italian/German 10Y Yld Spread 106.0 +1.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 85.09 -.14%
  

• Emerging Market CDS Index 157.10 -.25%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.07 -.43%

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

• TED Spread 10.0 -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 +.5 basis point
  
• MBS  5/10 Treasury Spread  72.25 -1.0 basis points
  
• IHS Markit CMBX BBB- 6 73.25 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.62 +.30%
• 3-Month T-Bill Yield .04% +1.0 basis point
  

• Yield Curve 124.0 +1.0 basis point
  

• China Iron Ore Spot 202.75 USD/Metric Tonne +1.2%

• Citi US Economic Surprise Index 46.2 -.3 point

• Citi Eurozone Economic Surprise Index 89.10 -2.5 points
  

• Citi Emerging Markets Economic Surprise Index 76.5 +.2 point

• 10-Year TIPS Spread 2.32 +4.0 basis points
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -64 open in Japan 
• China A50 Futures: Indicating -66 open in China

• DAX Futures: Indicating -23 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long