Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +13.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 17.6 -.5
• 2 Sectors Declining, 9 Sectors Rising
• 66.9% of Issues Advancing, 31.0% Declining 
• TRIN/Arms 1.1 -41.6% 
  
• Non-Block Money Flow +$11.4M
  
• 101 New 52-Week Highs, 9 New Lows
• 56.3% (+3.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.7 +3.6

Other:

• Bloomberg Global Risk-On/Risk-Off Index 76.7% +.8%
• Bloomberg Cyclicals/Defensives Index 251.1 +.2%
  
• Morgan Stanley Growth vs Value Index 163.2 -1.6%
• CNN Fear & Greed Index 76.0 (EXTREME GREED) +1.0
• 1-Day Vix 8.0 -16.8%
  
• Vix 15.8 -.6%
  
• Total Put/Call .72 -17.2%
• Polymarket:  Which Countries Will the US Agree to Tariff Agreements with Before August?

• EU 78.0% +1.0 percentage point.
• India 64.0% -13.0 percentage points.
• Japan 43.0% -1.0 percentage point. 
• South Korea  44.0% -5.0 percentage points.

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 72.75 -.25 basis point.
• China Sovereign CDS 46.5 -.5 basis point.
• China Iron Ore Spot 97.1 USD/Metric Tonne +1.1%. 
• Polymarket:  Which Countries Will the US Agree to Tariff Agreements with Before August?

• EU 77.0% +1.0 percentage point.
• India 77.0% -1.0 percentage point.
• Japan 44.0% -14.0 percentage points. 
• South Korea  49.0% +2.0 percentage points.

• Swiss Franc/Offshore Chinese Renminbi Cross 9.05 +.12%.
• Bloomberg Emerging Markets Currency Index 37.0 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 76.0 -.2%.
• US 10-Year Yield 4.33% unch.
• Volatility Index(VIX) futures 19.4 +.7%.  
• Euro Stoxx 50 futures +.20%. 
• S&P 500 futures -.24%. 
• NASDAQ 100 futures -.27%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.

Stocks Rising into Final Hour on Falling Long-Term Rates, Rising Fed Rate-Cut Odds, Short-Covering, Biotech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 15.9 -5.4%
• S&P 500 Intraday % Swing .61 +50.9%
• Bloomberg Global Risk On/Risk Off Index 77.5 +1.6% 
• Swiss Franc/Offshore Chinese Renminbi Cross 9.04 +.18%

• Euro/Yen Carry Return Index 192.99 -.28%

• Emerging Markets Currency Volatility(VXY) 7.79 -.64%

• CBOE S&P 500 Implied Correlation Index 17.5 -5.1% 

• ISE Sentiment Index 175.0 -22.0

• Total Put/Call .86 +1.2%

• NYSE Arms 1.65 +63.4%
• NYSE Non-Block Money Flow +$40.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 50.4 -1.6%
  

• US Energy High-Yield OAS 374.3 -.45%
• Bloomberg TRACE # Distressed Bonds Traded 181.0 -9.0

• European Financial Sector CDS Index 57.8 -1.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 127.1 -.63%
  

• Italian/German 10Y Yld Spread 85.0 unch.

• Asia Ex-Japan Investment Grade CDS Index 73.2 -.42%
  

• Emerging Market CDS Index 154.2 -1.3%
• Israel Sovereign CDS 81.4 -1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.97 +.09%

• 2-Year SOFR Swap Spread -25.0 basis points -.5 basis point

• 3M T-Bill Treasury Repo Spread 3.25 basis point -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap .75 +.25 basis point
• MBS  5/10 Treasury Spread 143.0 -2.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 599.0 -1.0 basis point
• Avg. Auto ABS OAS 55.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.0 -.01%
• US 10-Year T-Note Yield 4.34% -6.0 basis points
• 3-Month T-Bill Yield 4.35% unch.

• China Iron Ore Spot 96.5 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 34.3 euros/megawatt-hour +.3%

• Citi US Economic Surprise Index 1.1 +.2 point

• Citi Eurozone Economic Surprise Index 32.2 unch.

• Citi Emerging Markets Economic Surprise Index 24.2 -.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(18 of 500 reporting) +1.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 281.41 +.19:  Growth Rate +10.7% +.1 percentage point, P/E 22.2 unch.
• S&P 500 Current Year Estimated Profit Margin 13.44% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 447.74 +.35: Growth Rate +19.9% +.1 percentage point, P/E 33.5 +.3
• Bloomberg US Financial Conditions Index .57 +4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.70 +4.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 7.0 +1.2
• US Yield Curve 47.75 basis points (2s/10s) -2.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.6% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.5% unch.

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.64% unch.
• 1-Year TIPS Spread 2.75 -4.0 basis points
• 10-Year TIPS Spread 2.34 -2.0 basis points
• Highest target rate probability for Sept. 17th FOMC meeting: 66.3% (+5.5 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 44.1%(-2.0 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Polymarket:

• Which Countries Will the US Agree to Tariff Agreements with Before August? 

• EU 76.0% unch.
• India 74.0% -4.0 percentage points.
• Japan 45.0% -15.0 percentage points 
• South Korea  51.0% +4.0 percentage points

Overseas Futures:

• Nikkei 225 Futures: Indicating +150 open in Japan 
• China A50 Futures: Indicating -67 open in China

• DAX Futures: Indicating +171 open in Germany

Portfolio:

• Higher: On gains in my tech/consumer discretionary/utility/industrial/financial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.2%
  

Sector Underperformers:

• 1) Oil Service -1.2% 2) Shipping -.8% 3) Foods -.7%

Stocks Falling on Unusual Volume: 

• ERJ, CORZ, XYF, SCCO, OTEX, CDTX, MO, HSY, FICO, MBLY, CNK, AEHR, WPP, BMNR and ERO

Stocks With Unusual Put Option Activity:

• 1) XME 2) BTBT 3) SBET 4) TSCO 5) LW

Stocks With Most Negative News Mentions:

• 1) EVTL 2) RXST 3) AEHR 4) BABA 5) OI

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) XLY 3) XLE 4) IHI 5) XRT

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.2%

Sector Outperformers:

• 1) Homebuilding +3.6% 2) Biotech +2.3% 3) Alt Energy +1.8%

Stocks Rising on Unusual Volume:

• RYTM, VRNA, DNTH, AES, NEGG, BE, EYPT, ALLT, ARQQ, MNTN, ELVN, PRAX, FUTU, TDS, PSIX, LENZ, NTLA, REPL, PUBM, PENG, OCUL, COGT, USM, BBIO, CRSP, CYTK, RNA, AGIO, ARCT, ASND, NAMS, KALV, ALAB, CNTA, MBX, ZETA, HIPO, MBX, Z, BLD, ZG, AAOI, BA, BEAM, RARE, TIGR, KBH, ROIV, APGE, HROW, CRDO, OUST, TMHC, AXSM, DHI, SLNO, TTMI, VRNS, BYD, LEN, RDW, MDB, KRYS, TECX, MLTX, APEI, TOL, ENVX, ANET, DOW, SGHC, AI and ENPH

Stocks With Unusual Call Option Activity:

• 1) PROK 2) VRNA 3) CPRT 4) ACI 5) TSLY

Stocks With Most Positive News Mentions:

• 1) EVOK 2) BE 3) AES 4) BLD 5) BA

Sector ETFs With Most Positive Money Flow:

• 1) FDN 2) XLU 3) KRE 4) XLK 5) XLV

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:

• (CAG)/.58
• (DAL)/2.07
• (HELE)/.85
• (SMPL)/.50 

After the Close: 

• (LEVI)/.13
• (PSMT)/1.12
• (WDFC)/1.44 

Economic Releases 

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 235K versus 233K the prior week.
• Continuing Claims are estimated to rise to 1965K versus 1964K prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Daly speaking, Fed's Waller speaking, Fed's Musalem speaking, 30Y T-Bond auction, weekly EIA natural gas inventory report, Fed's weekly balance sheet report, (CHWY) annual meeting and the CJS Securities Investor Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST