Stocks Rising into Close on Lower Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 11.9 -3.0%
• DJIA Intraday % Swing .31 -69.4%
  
• Bloomberg Global Risk On/Risk Off Index 62.1 +2.5%

• Euro/Yen Carry Return Index 190.2 +.03%

• Emerging Markets Currency Volatility(VXY) 7.9 +1.3%

• CBOE S&P 500 Implied Correlation Index 8.0 -4.9% 

• ISE Sentiment Index 153.0 +21.0
  

• Total Put/Call .90 -1.1%

• NYSE Arms 1.41 +28.2%
  
• NYSE Non-Block Money Flow -$143.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 51.2 -2.4%
  

• US Energy High-Yield OAS 270.6 +1.3%
• Bloomberg TRACE # Distressed Bonds Traded 270 +10
  

• European Financial Sector CDS Index 66.8 -.9%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 174.7 -.7%
  

• Italian/German 10Y Yld Spread 145.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 97.3 -.9%
  

• Emerging Market CDS Index 172.4 -1.0%
  
• Israel Sovereign CDS 145.4 +.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.8 +.36%

• 2-Year SOFR Swap Spread -14.5 basis points -.75 basis point
  

• Treasury Repo 3M T-Bill Spread 4.75 basis points +2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 +.5 basis point
  
• MBS  5/10 Treasury Spread 151.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 720.0 +1.0 basis point
  
• Avg. Auto ABS OAS 61.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.0 +.01%
• 3-Month T-Bill Yield 5.38% +2.0 basis points
  

• China Iron Ore Spot 109.0 USD/Metric Tonne -.9%
• Dutch TTF Nat Gas(European benchmark) 33.7 euros/megawatt-hour +.6%

• Citi US Economic Surprise Index -30.4 +2.0 points

• Citi Eurozone Economic Surprise Index -10.4 +3.6 points

• Citi Emerging Markets Economic Surprise Index 7.7 -1.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +4.1% n/a
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.89 n/a:  Growth Rate +14.3% n/a, P/E 21.0 n/a
  
• S&P 500 Current Year Estimated Profit Margin 12.85% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 329.65 n/a: Growth Rate +22.9% n/a, P/E 35.4 n/a
  
• Bloomberg US Financial Conditions Index .99 -4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .65 +19.0 basis points
  
• US Yield Curve -31.25 basis points (2s/10s) +1.5 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +1.7% -50.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 51.1% +.7 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.61% +5.0 basis points: CPI YoY +3.12% unch.
  
• 10-Year TIPS Spread 2.30 -2.0 basis points
  
• Highest target rate probability for Sept. 18th FOMC meeting: 63.2%(+3.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 52.7%(+2.0 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +235 open in Japan 
• China A50 Futures: Indicating -154 open in China

• DAX Futures: Indicating +182 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth +.1%
  

Sector Underperformers:

• 1) Homebuilding -1.1% 2) Biotech -1.0% 3) Telecom -1.0%

Stocks Falling on Unusual Volume: 

• FLNC, BLBD, RDUS, RCM and PCRX
  

Stocks With Unusual Put Option Activity:

• 1) CPNG 2) AAP 3) MTUM 4) ANVS 5) CONN
  

Stocks With Most Negative News Mentions:

• 1) CONN 2) RDUS 3) CMBM 4) RCM 5) ALT
  

Sector ETFs With Most Negative Money Flow:

• 1) XLU 2) XLI 3) KBWB 4) ITB 5) IYJ

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.7%
  

Sector Outperformers:

• 1) Semis +1.0% 2) Regional Banks +.9% 3) Shipping +.9%

Stocks Rising on Unusual Volume:

• CENX, IREN, VSAT, TSLA, RIVN, RDDT, EVH, NOAH, ALKT, HDB, CORZ, BTDR, VIST, LOAR, BJRI and SPHR
  

Stocks With Unusual Call Option Activity:

• 1) CRH 2) NKLA 3) ON 4) DISH 5) XHB

Stocks With Most Positive News Mentions:

• 1) RDZN 2) VS 3) BEEM 4) LBPH 5) SMCI
  

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLV 3) SMH 4) XLK 5) XLC
  

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:

• (STZ)/3.46
  

After the Close: 

• None of note
  

Economic Releases

7:30 am EST

• Challenger Job Cuts report.
  

8:15 am EST

• ADP Employment Change for June is estimated to rise to 165K versus 152K in May.

8:30 am EST

• Initial Jobless Claims for last week is estimated to rise to 235K versus 233K the prior week.
• Continuing Claims is estimated to rise to 1841K versus 1839K prior.

10:00 am EST

• Factory Orders for May is estimated to rise +.2% versus a +.7% gain in April.
• ISM Services Index for June is estimated to fall to 52.6 versus 53.8 in May.
• ISM Services Prices Paid for June is estimated to fall to 56.5 versus 58.1 in May.
  

2:00 pm EST

• FOMC Meeting Minutes.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Williams speaking, weekly MBA Mortgage Applications report and the Atlanta Fed GDPNow Q2 update could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 1:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -20.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.8 +.3
  
• 3 Sectors Declining, 8 Sectors Rising
• 59.5% of Issues Advancing, 37.6% Declining 
• TRIN/Arms 1.45 +31.8%
  
• Non-Block Money Flow -$93.7M
  
• 47 New 52-Week Highs, 49 New Lows
• 52.5% (+.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.0 -2.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.3 +1.2%
• Bloomberg Cyclicals/Defensives Index 241.0 +.1%
  
• Russell 1000: Growth/Value 21,283.0 +.3%
• CNN Fear & Greed Index 49.0 (NEUTRAL) +2.0
  
• 1-Day Vix 8.1 -.4%
  
• Vix 12.1 -.9%
  
• Total Put/Call .86 -5.5%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 96.5 -1.75 basis points.

• China Sovereign CDS 66.25 -.5 basis point.
  
• China Iron Ore Spot 109.5 USD/Metric Tonne -.21%.

• Bloomberg Emerging Markets Currency Index 39.0 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 61.1 +.9%.
• Volatility Index(VIX) futures 14.4 -.21%.
• Euro Stoxx 50 futures -.06%.

• S&P 500 futures -.17%.

• NASDAQ 100 futures -.33%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.