Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 98.0 +2.25 basis points. 

• China Sovereign CDS 61.5 +.75 basis point.
  
• China Iron Ore Spot 101.4 USD/Metric Tonne +.67%.

• Bloomberg Emerging Markets Currency Index 42.6 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 69.4 unch. 
• Bloomberg US Financial Conditions Index .33 -1.0 basis point.
  
• Volatility Index(VIX) futures 17.5 -1.1%.
• Euro Stoxx 50 futures -.25%.

• S&P 500 futures +.16%.

• NASDAQ 100 futures +.32%.  

Morning Preview Links

BOTTOM LINE: Asian indices are slightly lower, weighed down by consumer and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.

Stocks Modestly Higher into Final Hour on Earning Outlook Optimism, Less Hawkish Fed Hopes, Technical Buying, Tech/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.3 +2.1%
• DJIA Intraday % Swing 1.09%
  
• Bloomberg Global Risk On/Risk Off Index 69.3 +1.2%

• Euro/Yen Carry Return Index 168.0 +.8%

• Emerging Markets Currency Volatility(VXY) 9.0 -1.3%

• CBOE S&P 500 Implied Correlation Index 22.1 +3.1% 

• ISE Sentiment Index 95.0 -38.0 points
  

• Total Put/Call 1.06 +8.2%

• NYSE Arms .83 -32.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.6 -1.1%
  

• US Energy High-Yield OAS 335.5 -1.1%
• Bloomberg TRACE # Distressed Bonds Traded 348.0 +10.0
  

• European Financial Sector CDS Index 80.6 -2.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 239.7 -2.4%
  

• Italian/German 10Y Yld Spread 162.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 97.17 +2.0%
  

• Emerging Market CDS Index 200.1 -1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.4 -.2%

• 2-Year Swap Spread 21.25 basis points unch.
  

• TED Spread 20.0 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.25 +1.75 basis points
  
• MBS  5/10 Treasury Spread 172.0 +5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 757.0 +3.0 basis points
  
• Avg. Auto ABS OAS 70.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.7 +.3%
• 3-Month T-Bill Yield 5.43% unch.
  

• China Iron Ore Spot 101.4 USD/Metric Tonne +.7%
• Dutch TTF Nat Gas(European benchmark) 37.1 euros/megawatt-hour  -7.0%

• Citi US Economic Surprise Index 74.4 -4.3 points

• Citi Eurozone Economic Surprise Index -85 +1.4 points

• Citi Emerging Markets Economic Surprise Index 7.0 +3.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(454 of 500 reporting) -8.2%  n/a
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.0 n/a:  Growth Rate +7.0% n/a, P/E 19.2 n/a
  
• S&P 500 Current Year Estimated Profit Margin 12.14% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +17.0% n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 231.0 n/a: Growth Rate +40.8% n/a, P/E 33.1 n/a
  
• Bloomberg US Financial Conditions Index .31 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index -.12 +4.0 basis points
  
• US Yield Curve -74.0 basis points (2s/10s) +6.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.12% +7.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.23% -14.0 basis points: CPI YoY +3.81% +39.0 basis points
  
• 10-Year TIPS Spread 2.34 unch.
  
• Highest target rate probability for Nov. 1st FOMC meeting: 71.8%(+2.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Dec. 13th meeting: 63.8%(-.3 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +112 open in Japan 
• China A50 Futures: Indicating +7 open in China

• DAX Futures: Indicating +10 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.8%
  

Sector Underperformers:

• 1) Alt Energy -2.0% 2) Homebuilding -2.0% 3) Steel -1.2%

Stocks Falling on Unusual Volume: 

• ACDC, SATS, SLVM, SWAV, UPST, SIX, PENN, ARMK, NVEI, PFLT, CPA, BXSL, SONO, ALTG, BSM, HE, IMCR, FLYW, FLNC, PAR, CERT, EHAB, TASK, AMPH, ENS, HROW, DNUT, TPR, OSPN and EBIX
  

Stocks With Unusual Put Option Activity:

• 1) EBIX 2) CPRI 3) VST 4) APP 5) NLY
  

Stocks With Most Negative News Mentions:

• 1) ORGN 2) PLUG 3) PTRA 4) NEON 5) TCRX
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.2%
  

Sector Outperformers:

• Networking +1.9% 2) Telecom +1.1% 3) Gambling +.9%

Stocks Rising on Unusual Volume:

• APP, LAW, YETI, QNST, ALRM, APLS, RAMP, DCPH, CCOI, KD, PUBM, PRMW, HLIT, EYPT, JBI, VSAT, MRTX, DDOG, BERY, FLT, DIS, RPD, PODD, RBLX, JXN, GPCR and WYNN
  

Stocks With Unusual Call Option Activity:

• 1) WE 2) CPRI 3) IAC 4) APP 5) EBIX

Stocks With Most Positive News Mentions:

• 1) EDBL 2) APP 3) MGNX 4) LAW 5) YETI
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (SPB)/.48
  

After the Close: 

• None of note
  

Economic Releases  

8:30 am EST

• PPI Final Demand MoM for July is estimated to rise +.2% versus a +.1% gain in June.
• PPI Ex Food and Energy MoM for July is estimated to rise +.2% versus a +.1% gain in June.
  

10:00 am EST

• Univ. of Mich. Consumer Confidence for August is estimated to fall to 71.3 versus 71.6 in July.
• Univ. of Mich. 1Y Inflation Expectations for August is estimated to rise +3.5% versus a +3.4% gain in June.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The UK Industrial Production report could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running +7.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.4 +5.9
  
• 0 Sectors Declining, 11 Sectors Rising
• 71.9% of Issues Advancing, 25.3% Declining
• 60 New 52-Week Highs, 13 New Lows
• 55.6%(+4.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.0 +2.0
  
• Bloomberg Global Risk-On/Risk-Off Index 69.6 +1.9%
  
• Russell 1000: Growth/Value 17,126.9 +.4%
• 1-Day Vix 12.3 -29.2%
  
• Vix 15.3 -4.3%
  
• Total Put/Call .96 -2.0%
• TRIN/Arms 1.23 +.82%