Friday Watch

Night Trading 

• Asian equity indices are -.5% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 68.75 unch.
• China Sovereign CDS 41.0 +.25 basis point.
• China Iron Ore Spot 103.6 USD/Metric Tonne -1.5%. 
• Polymarket:  Which Countries Will the US Agree to Tariff Agreements with Before August?

• EU 59.0% +2.0 percentage points
• India 25.0% +4.0 percentage points.
• South Korea  49.0% -12.0 percentage points.
• Mexico 32.0% +11.0 percentage points. 

• Swiss Franc/Offshore Chinese Renminbi Cross 8.99 -.04%.
• Bloomberg Emerging Markets Currency Index 36.8 +.14%.
• Bloomberg Global Risk-On/Risk Off Index 80.9 -1.2%.
• US 10-Year Yield 4.39% -1.0 basis point.
• Volatility Index(VIX) futures 18.0 -.7%.
• Euro Stoxx 50 futures unch. 
• S&P 500 futures +.20%. 
• NASDAQ 100 futures +.16%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by metals & mining 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.

Stocks Modestly Higher into Final Hour on US-Global Trade Deal Optimism, Trump Admin AI/Grid Focus, Earnings Outlook Boosts, Tech/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 15.0 -2.0%
• S&P 500 Intraday % Swing .30 -56.3%
• Bloomberg Global Risk On/Risk Off Index 82.6 +4.6% 
• Swiss Franc/Offshore Chinese Renminbi Cross 9.0 -.23%

• Euro/Yen Carry Return Index 194.74 +.23%

• Emerging Markets Currency Volatility(VXY) 7.52 +.27%

• CBOE S&P 500 Implied Correlation Index 18.7 -1.8% 

• ISE Sentiment Index 193.0 +7.0

• Total Put/Call .85 +6.3%

• NYSE Arms 1.07 +40.8%
• NYSE Non-Block Money Flow -$145.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 50.2 +.2%
  

• US Energy High-Yield OAS 369.8 -1.3%
• Bloomberg TRACE # Distressed Bonds Traded 197.0 -4.0

• European Financial Sector CDS Index 56.4 -.7%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 122.4 -2.6%
  

• Italian/German 10Y Yld Spread 85.0 +3.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 69.0 -.7%
  

• Emerging Market CDS Index 151.2 +.2%
• Israel Sovereign CDS 77.1 +.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.2 +.06%

• 2-Year SOFR Swap Spread -25.0 basis points unch.

• 3M T-Bill Treasury Repo Spread 8.0 basis point +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap 1.5 unch.
• MBS  5/10 Treasury Spread 148.0 -1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 591.0 +1.0 basis point
• Avg. Auto ABS OAS 53.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.8 -.11%
• US 10-Year T-Note Yield 4.41% +2.0 basis points
• 3-Month T-Bill Yield 4.35% +1.0 basis point

• China Iron Ore Spot 103.3 USD/Metric Tonne -1.8%
• Dutch TTF Nat Gas(European benchmark) 32.4 euros/megawatt-hour -1.0%

• Citi US Economic Surprise Index 2.4 -2.3 points

• Citi Eurozone Economic Surprise Index 33.5 +2.0 points

• Citi Emerging Markets Economic Surprise Index 16.1 -.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(153 of 500 reporting) +9.0% +.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 283.02 -.09:  Growth Rate +10.8% unch., P/E 22.5 +.1
• S&P 500 Current Year Estimated Profit Margin 13.42% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +22.4% -23.1 percentage points
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 452.85 +.39: Growth Rate +20.0% +.1 percentage point, P/E 33.3 +.4
• Bloomberg US Financial Conditions Index .62 +9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.46 +5.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 6.5 -.4
• US Yield Curve 48.75 basis points (2s/10s) -1.25 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.4% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.2% -2.1 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.73% unch.
• 1-Year TIPS Spread 2.73 -4.0 basis points
• 10-Year TIPS Spread 2.42 +3.0 basis points
• Highest target rate probability for Sept. 17th FOMC meeting: 60.5% (+.6 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 50.4%(+1.5 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 64.0% +7.0 percentage points.
• India 36.0% +15.0 percentage points.
• South Korea  57.0% -4.0 percentage points.
• Mexico 32.0% +11.0 percentage points. 

Overseas Futures:

• Nikkei 225 Futures: Indicating -56 open in Japan 
• China A50 Futures: Indicating -30 open in China

• DAX Futures: Indicating +83 open in Germany

Portfolio:

• Higher: On gains in my tech/utility/industrial/financial sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value -1.0%
  

Sector Underperformers:

• 1) Computer Services -5.6% 2) Airlines -4.3% 3) Healthcare Providers -2.5%

Stocks Falling on Unusual Volume: 

• SAH, IREN, DAR, FLEX, TXT, WAB, ALK, LUNR, BULL, TECK, WLK, PTLO, STOK, RKT, MTH, CNC, ON, OSCR, SBET, ITGR, IBM, ITGR, OSCR, BC, CALM, QFIN, NATL, TSLA, AI, AAL, GLPG, IPAR, LYB, VICR, RS, MOH, LUV, BKKT, MAT, ORLA, CMG, GSHD, HZO, DOW, STM, SRPT, SIGI, IRDM, EGBN and LKQ

Stocks With Unusual Put Option Activity:

• 1) RSP 2) CMG 3) IBM 4) LUV 5) MOH

Stocks With Most Negative News Mentions:

• 1) IBM 2) LUV 3) NVCR 4) CYH 5) SRPT

Sector ETFs With Most Negative Money Flow:

• 1) IYW 2) KBWB 3) XLY 4) GDX 5) IGV

Charts:

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

Bull Radar

Style Outperformer:

• Largfe-Cap Growth +.4%

Sector Outperformers:

• 1) Electrification +2.4% 2) Nuclear +1.4% 3) Shipping +.7%

Stocks Rising on Unusual Volume:

• BE, WST, TREE, ICLR, SEI, MXL, ASGN, FTI, OKLO, DQ, SDM, WEX, MNSO, KSS, SGMT, DB, RPM, PTHL, NDAQ, URI, LH, BMNR, CRL, KB, SDM, TMUS, FAF, IDYA, GL, OII, ALB, STVN, ROL, MESO, FBNC, WH, FBNC, WH, AOS, ALLE, SQM, FCN, TECH, LEU, ORLY, PHIN, VEON, BX, VTLE, RJF, ZTO, SMR, NNE, GLXY, GHRS, EQT, TPG, AEO, NUTX, TOWN, IQV, SSNC, DNA, CHDN, TRU, MEDP, TMO, NOW and GMAB

Stocks With Unusual Call Option Activity:

• 1) DDD 2) AEO 3) CMA 4) VERV 5) UNIT

Stocks With Most Positive News Mentions:

• 1) WST 2) LVS 3) MXL 4) ICLR 5) NOW

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLV 3) CONY 4) GNR 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:

• (AON)/3.40
• (AN)/4.70
• (BAH)/1.45
• (CRI)/.36
• (CNC)/.13
• (CHTR)/9.58
• (GNTX)/.39
• (HCA)/6.29
• (LEA)/3.30
• (PSX)/1.72
• (SAIA)/2.40 

After the Close: 

• None of note

Economic Releases 

8:30 am EST

• Durable Goods Orders for June is estimated to fall -10.5% versus a +16.4% gain in May.
• Durables Ex Transports for June is estimated to rise +.1% versus a +.5% gain in May. 
• Cap Goods Orders Non-Defense Ex-Air for June is estimated to rise +.1% versus a +1.7% gain in May. 

11:00 am EST

• Kansas City Fed Services Activity Index for July.
• Bloomberg July US Economic Survey. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Atlanta Fed GDPNow Q2 update, CFTC weekly speculative net positioning report and the weekly US Baker Hughes rig count 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 +15.0% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 23.9 +7.4
• 4 Sectors Declining, 7 Sectors Rising
• 36.5% of Issues Advancing, 60.8% Declining 
• TRIN/Arms .83 +9.2% 
  
• Non-Block Money Flow -$81.0M
  
• 101 New 52-Week Highs, 15 New Lows
• 55.6% (-3.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 68.1 +1.1

Other:

• Bloomberg Global Risk-On/Risk-Off Index 80.8% +2.3%
• Bloomberg Cyclicals/Defensives Index 250.0 -.4%
  
• Morgan Stanley Growth vs Value Index 165.6 +.3%
• CNN Fear & Greed Index 77.0 (EXTREME GREED) +1.0
• 1-Day Vix 7.4 -26.0%
  
• Vix 15.0 -2.4%
  
• Total Put/Call .79 -1.3%
• Polymarket:  Which Countries Will the US Agree to Tariff Agreements with Before August?

• EU 59.0% +2.0 percentage points.
• India 20.0% -1.0 percentage point.
• South Korea  53.0% -8.0 percentage points.
• Mexico 29.0% +8.0 percentage points.