Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 100.0 +.5 basis point.

• China Sovereign CDS 68.0 +.75 basis point.
  
• China Iron Ore Spot 103.3 USD/Metric Tonne +.7%.

• Bloomberg Emerging Markets Currency Index 39.1 unch.
• Bloomberg Global Risk-On/Risk Off Index 56.6 -.9%.
• Volatility Index(VIX) futures 14.5 +.4%.
• Euro Stoxx 50 futures -.56%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.04%.  

Morning Preview Links

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 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Stable Long-Term Rates, Sector Rotation, Short-Covering, Commodity/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.4 +1.4%
• DJIA Intraday % Swing .99 +97.7%
  
• Bloomberg Global Risk On/Risk Off Index 57.2 +.5%

• Euro/Yen Carry Return Index 187.7 +.3%

• Emerging Markets Currency Volatility(VXY) 7.6 -.7%

• CBOE S&P 500 Implied Correlation Index 11.3 +10.7% 

• ISE Sentiment Index 147.0 +19.0
  

• Total Put/Call .95 +11.8%

• NYSE Arms .99 -7.5%
  
• NYSE Non-Block Money Flow +$127.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 52.9 -.6%
  

• US Energy High-Yield OAS 275.3 -.29%
• Bloomberg TRACE # Distressed Bonds Traded 258 +6
  

• European Financial Sector CDS Index 70.2 -4.3%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 183.3 -2.6%
  

• Italian/German 10Y Yld Spread 151.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 100.1 +.5%
  

• Emerging Market CDS Index 171.9 -.07%
  
• Israel Sovereign CDS 132.2 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.16%

• 2-Year SOFR Swap Spread -18.25 basis points -.5 basis point
  

• Treasury Repo 3M T-Bill Spread 5.0 basis points -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -.5 basis point
  
• MBS  5/10 Treasury Spread 144.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 717.0 -1.0 basis point
  
• Avg. Auto ABS OAS 61.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.1 +.2%
• 3-Month T-Bill Yield 5.35% -1.0 basis point
  

• China Iron Ore Spot 103.2 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 34.1 euros/megawatt-hour +.4%

• Citi US Economic Surprise Index -26.7 -1.1 point

• Citi Eurozone Economic Surprise Index -14.2 -4.4 points

• Citi Emerging Markets Economic Surprise Index 10.3 +.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(9 of 500 reporting) +2.0% -1.8 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.12 +.60:  Growth Rate +14.0% +.2 percentage point, P/E 21.1 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.83% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 336.15 +1.53: Growth Rate +25.3% +.6 percentage point, P/E 33.0 -.9
  
• Bloomberg US Financial Conditions Index .97 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .54 -2.0 basis points
  
• US Yield Curve -49.0 basis points (2s/10s) -1.0 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +3.0% -10.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.9% -2.0 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.13% unch.
  
• 10-Year TIPS Spread 2.23 unch.
  
• Highest target rate probability for Sept. 18th FOMC meeting: 61.1%(+1.6 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 50.3%(-.2 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +40 open in Japan 
• China A50 Futures: Indicating +24 open in China

• DAX Futures: Indicating +101 open in Germany

Portfolio:

• Modestly Higher:  On gains in my industrial/consumer discretionary/biotech/financial sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.6%
  

Sector Underperformers:

• 1) Semis -2.4% 2) Gambling -1.3% 3) Networking -1.3%

Stocks Falling on Unusual Volume: 

• TTMI, MAX, SILA, AMSC, SON, NU, SPR, TNDM, AHCO, PAY, RMD, BBIO and INSP
  

Stocks With Unusual Put Option Activity:

• 1) PTEN 2) NYCB 3) PSEC 4) NKLA 5) ANVS
  

Stocks With Most Negative News Mentions:

• 1) RMD 2) BBIO 3) NVDA 4) EXAI 5) FSLY
  

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) SMH 3) XLC 4) RSPT 5) QTEC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.1%
  

Sector Outperformers:

• 1) Oil Service +3.1% 2) Regional Banks +2.2% 3) Biotech +2.1%

Stocks Rising on Unusual Volume:

• ALNY, NNE, DJT, RXO, ARGX, AFRM, ARWR, RCKT, PUK, EDU, TDOC, MIRM, NBR, TALO, CHWY, CNK, SVCO, URGN, GLNG, CHX, CECO, RH, IONS, TROX, SLB, SBS, WFRD, NFE, ERO, IMO, ESTA, OXY, BPOP, SCS, RGP, BBVA, RGP, MTH, HBAN, PPBI, PAL, SNY, BVN and TNP
  

Stocks With Unusual Call Option Activity:

• 1) ACHR 2) BBIO 3) LQDA 4) ALT 5) ALNY

Stocks With Most Positive News Mentions:

• 1) ALNY 2) RXO 3) AFRM 4) EDU 5) ACET
  

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) HACK 3) VGT 4) XLB 5) XLI
  

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:

• (SNX)/2.82
• (CCL)/-.02
  

After the Close: 

• (FDX)/5.34
• (PRGS)/.95
• (WOR)/.88
• (JEF)/.63
  

Economic Releases

8:30 am EST

• The Philly Fed Non-Manufacturing Activity Index for June.
• The Chicago Fed National Activity Index for May is estimated to fall to -.25 versus -.23 in April.

9:00 am EST

• The FHFA Houses Price Index MoM for April is estimated to rise +.3% versus a +.1% gain in March.
• The S&P CoreLogic CS 20-City MoM SA for April is estimated to rise +.3% versus a +.33% gain in March.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for June is estimated to fall to 100.0 versus 102.0 in May.
• The Richmond Fed Manufacturing Index for June is estimated to fall to -3 versus 0 in May.
  

Upcoming Splits

• (CMG) 50-for-1
  

Other Potential Market Movers

• The Fed's Cook speaking, Fed's Bowman speaking, 2Y T-Note auction, weekly US retail sales reports, (KMX) annual meeting and the (EXPE) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -12.2% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.4 -2.3
  
• 2 Sectors Declining, 9 Sectors Rising
• 72.2% of Issues Advancing, 25.0% Declining 
• TRIN/Arms 1.03 -3.7%
  
• Non-Block Money Flow +$194.1M
  
• 72 New 52-Week Highs, 15 New Lows
• 53.3% (+4.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.0 +2.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 57.2 +.5%
• Bloomberg Cyclicals/Defensives Index 237.9 -.3%
  
• Russell 1000: Growth/Value 20,569.4 -1.2%
• CNN Fear & Greed Index 42.0 (FEAR) +2.0
  
• 1-Day Vix 7.9 -11.7%
  
• Vix 13.2 +.2%
  
• Total Put/Call .92 +8.2%