Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Rotation into FANG, Technical Buying, Transport/Regional Bank Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.6 -1.8%
• DJIA Intraday % Swing .66 -38.5%
  
• Bloomberg Global Risk On/Risk Off Index 57.8 +2.6%

• Euro/Yen Carry Return Index 188.0 +.3%

• Emerging Markets Currency Volatility(VXY) 7.8 +2.2%

• CBOE S&P 500 Implied Correlation Index 9.6 -7.5% 

• ISE Sentiment Index 165.0 +19.0
  

• Total Put/Call .70 -22.2%

• NYSE Arms .86 -47.2%
  
• NYSE Non-Block Money Flow -$355.5M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.98 +.06%
  

• US Energy High-Yield OAS 271.43 -.64%
• Bloomberg TRACE # Distressed Bonds Traded 265 +6
  

• European Financial Sector CDS Index 72.5 +2.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 184.2 +.32%
  

• Italian/German 10Y Yld Spread 154.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 100.0 -.9%
  

• Emerging Market CDS Index 172.4 +.43%
  
• Israel Sovereign CDS 134.4 +.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.87 -.12%

• 2-Year SOFR Swap Spread -13.75 basis points +4.25 basis points
  

• Treasury Repo 3M T-Bill Spread 5.5 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +.75 basis point
  
• MBS  5/10 Treasury Spread 148.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 718.0 -3.0 basis points
  
• Avg. Auto ABS OAS 62.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.97 -.14%
• 3-Month T-Bill Yield 5.37% +1.0 basis point
  

• China Iron Ore Spot 106.6 USD/Metric Tonne -.08%
• Dutch TTF Nat Gas(European benchmark) 33.8 euros/megawatt-hour -3.0%

• Citi US Economic Surprise Index -26.9 -.9 point

• Citi Eurozone Economic Surprise Index -13.7 -.3 point

• Citi Emerging Markets Economic Surprise Index 10.7 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(13 of 500 reporting) +6.2% -.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.67 +.08:  Growth Rate +14.3% +.1 percentage point, P/E 21.0 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.86% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 328.61 +.26: Growth Rate +22.5% +.1 percentage point, P/E 34.3 +.4
  
• Bloomberg US Financial Conditions Index .96 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .55 -4.0 basis points
  
• US Yield Curve -43.25 basis points (2s/10s) +7.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +3.0% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 53.6% -.1 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.12% unch.
  
• 10-Year TIPS Spread 2.26 +4.0 basis points
  
• Highest target rate probability for Sept. 18th FOMC meeting: 56.3%(-2.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 50.3%(+.4 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -247 open in Japan 
• China A50 Futures: Indicating -208 open in China

• DAX Futures: Indicating +183 open in Germany

Portfolio:

• Slightly Lower:  On losses in my industrial/consumer discretionary/biotech sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Value -.7%
  

Sector Underperformers:

• 1) Construction -1.3% 2) Insurance -1.2% 3) Biotech -1.2%

Stocks Falling on Unusual Volume: 

• GSK, IMCR, GLW, TROX, WOR, GIS, KALV, SEDG, PAYX, ENVX, MAX, MRNA, APTV ad NNE
  

Stocks With Unusual Put Option Activity:

• 1) RIVN 2) HES 3) FDX 4) LW 5) WHR
  

Stocks With Most Negative News Mentions:

• 1) APTV 2) MRNA 3) MAX 4) GIS 5) DRCT
  

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) XLE 3) XLV 4) OIH 5) VOX

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.3%
  

Sector Outperformers:

• 1) Electric Vehicles +2.2% 2) Steel +1.0% 3) Internet +.6%

Stocks Rising on Unusual Volume:

• IOT, FROG, UPS, CCL, STAA, CPB, ALNY, BRZE, RGEN, TGLS, DAKT, RIVN, GRND, FDX, WHR, GTLB, VSTO, PRGS, ALB, EXAS, RPD, MDB, SQM, SVV, B, HUT, SNOW, TSLA, AMZN, X, JKS, IOT and CUK
  

Stocks With Unusual Call Option Activity:

• 1) FDX 2) GEO 3) MAXN 4) RIVN 5) TMC

Stocks With Most Positive News Mentions:

• 1) WHR 2) FDX 3) RIVN 4) TGLS 5) ORMP
  

Sector ETFs With Most Positive Money Flow:

• 1) XLI 2) XLU 3) IYW 4) SMH 5) XLP
  

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:

• (AYI)/4.08
• (APOG)/1.04
• (LNN)/1.17
• (MKC)/.59
• (SMPL)/.48
• (WBA)/.68
  

After the Close: 

• (ACCD)/-.48
• (NKE)/.84
  

Economic Releases

8:30 am EST

• 1Q GDP Annualized QoQ is estimated to rise +1.4% versus a prior estimate of a +1.3% gain.
• 1Q Personal Consumption is estimated to rise +2.0% versus a prior estimate of a +2.0% gain.
• 1Q Core PCE Price Index QoQ is estimated to rise +3.6% versus a prior estimate of a +3.6% gain.
• Advance Goods Trade Balance for May is estimated at -$96.0B versus -$99.4B in April.
• Wholesale Inventories MoM for May is estimated to rise +.1% versus a +.1% gain in April.
• Retail Inventories MoM for May is estimated to rise +.3% versus a +.7% gain in April.
• Initial Jobless Claims are estimated to fall to 235K versus 238K the prior week.
• Continuing Claims are estimated to rise to 1829K versus 1828K prior.
• Durable Goods Orders for May is estimated to fall -.4% versus a +.6% gain in April.
• Durables Ex Transports for May is estimated to rise +.2% versus a +.4% gain in April.
• Cap Goods Orders Non-Defense Ex-Air for May is estimated to rise +.1% versus a +.2% gain in April.
  

10:00 am EST

• Pending Home Sales MoM for May is estimated to rise +.5% versus a -7.7% decline in April.
  

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for June is estimated to fall to -5 versus -2 in May.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The US presidential debate after close, Atlanta Fed GDPNow 2Q update, Fed Bank Stress Test Results after close, weekly EIA natural gas inventory report, (DELL) annual meeting, (AEO) annual meeting, (KR) annual meeting, (CRM) annual meeting, (RH) annual meeting and the (AVAV) investor day 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 -17.3% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.2 +1.1
  
• 9 Sectors Declining, 2 Sectors Rising
• 37.2% of Issues Advancing, 60.2% Declining 
• TRIN/Arms .81 -50.3%
  
• Non-Block Money Flow -$301.7M
  
• 37 New 52-Week Highs, 57 New Lows
• 50.4% (-.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0 -1.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 56.7 +.4%
• Bloomberg Cyclicals/Defensives Index 239.1 +.5%
  
• Russell 1000: Growth/Value 20,977.6 +.73%
• CNN Fear & Greed Index 41.0 (FEAR) +2.0
  
• 1-Day Vix 7.9 -2.7%
  
• Vix 12.7 -.8%
  
• Total Put/Call .71 -21.1%

Wednesday Watch

Around X:

• @libsoftiktok

• Prosecutors reveal that Jocelyn fought her r*pists, leaving marks on one of the illegals accused of kiIIing her. This poor girl was abused for 2 hours before being strangled to death and tried to defend herself. RIP Jocelyn. (pic)
  

• @WallStreetApes

• Here’s The Uncut Version Of The CIA Chief Of Disguise Confirming They Use “Full Face Masks” To “Walk around as someone else”. This is why Joe Biden needs both a drug test and a DNA test before the CNN Debate with Donald Trump. “I was Chief of Disguise. The office I worked in was like the Q in James Bond. We were the Q for the CIA and the intelligence community. So there were different parts of it, whatever you needed. (video)
• UPDATE On The Lahaina Maui Fire Victims. NEW: “Aloha from Lahaina, Maui. June 22nd update. As you can see, you still can't get into Lahaina. Access is still restricted. Nobody's rebuilding yet still 10 months into the fires”. “To get a building permit, you have to go to the county. They now have a review board. You have to fill out this this paperwork. It's just endless, and it takes forever. It's a building permit process review board. Just everything's just being slowed down and dragging on, and you wonder why. (video)
• American Ranchers Have Been Abandoned By US Government & Allowed To Be Invaded By Illegal Migrants. “Everything down here is in disarray. Everything is it's horrible. It's horrible to have to live your life scared to death, wondering if this is the day that I'm gonna have to pull my pistol and actually use it. I'm tired of picking up the trash. I'm tired of fixing fences. ‌ I'm tired of living every day of my life wondering what's next. (video)

• @OilLondonTV 

• This is Hersh Goldberg-Polin. He is an AMERICAN citizen. This AMERICAN had his arm blown off as he was kidnapped on Oct 7th. This AMERICAN can be seen being brutalized by his kidnappers. This AMERICAN has been held hostage for 261 days. Where is the American media outrage? (video)
• This is Biden’s new White House Associate Communications Director. Tyler Cherry, who identifies as non-binary is: • Anti-Israel • Pro-Palestinian ‘Resistance’ • Anti-Police • Anti-Capitalism • Pro-BLM • Calls to Abolish the Police • Supports extreme antisemite Linda Sarsour calling her a ‘fierce Muslim woman.’ • Wants to stop all arms shipments to Israel.(pic)

• @wideawake_media

• "Would you be happy sharing, not owning, a car?" World Economic Forum: "The Netherlands is building a neighbourhood where every car must be shared. There'll be one vehicle for every three homes, and no space for privately owned cars." "Residents will be encouraged to cycle, use public transport, or borrow from a pool of shared cars... And everything that residents need will be within walking distance." (video)
• "This is probably the biggest con that we've ever had." Australian geologist, Prof. Ian Plimer: "There is no climate emergency... It has never been proven that human emissions of carbon dioxide drive global warming." (video)
  

• @amuse
  

• PRESIDENTIAL DEBATE: Can CNN's Dana Bash really be unbiased? (pic)
• DEI: Military leaders are now allowing members of the armed forces to wear patches and insignia on their uniforms to show their allegiance to political parties. In this case, a USAF commander allows airmen to show their allegiance to DEI by wearing a special Pride Patch. (pic)

• @AlexBerenson  

• The Pfizer/White House Files.

• @MJTruthUltra

• Ben Carson is Dropping Redpills… The 45 Goals of Communism in America — It’s Happening as we Speak. “Those who want to change us into a Marxist or communist country, they don’t care whether you’re democrat or Republican…” Read into the Congressional Record of 1963, The 45 Goals of Communism in America… (video)
  

• @ChrisMartzWX

• Okay. Study this chart. Look at it real hard. Look until your eyeballs fall out of their sockets. Materials requirements per terawatt-hour (TWh) of electricity produced for renewables:

• @P_McCulloughMD
  

• Five US States Take Pfizer to Court Over False COVID-19 Vaccine Claims. Investors should know that Moderna is next up for heavy litigation costs, fines, and declining sales as the mRNA vaccine bonanza plummets to a crash landing.

• @TulsiGabbard
  

• Did you hear about this video that was just banned on TikTok?  I didn’t believe it until I saw it. (video)

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 101.0 +1.0 basis point.

• China Sovereign CDS 69.0 +1.0 basis point.
  
• China Iron Ore Spot 103.5 USD/Metric Tonne +.2%.

• Bloomberg Emerging Markets Currency Index 39.0 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 56.5 +.2%.
• Volatility Index(VIX) futures 14.2 +.5%.
• Euro Stoxx 50 futures unch.

• S&P 500 futures -.05%.

• NASDAQ 100 futures -.03%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer 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.