Morning Market Internals

NYSE Composite Index:

• Volume Running +15.4% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 63.4% of Issues Advancing, 33.5% Declining
• 42 New 52-Week Highs, 26 New Lows
• 50.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.9%
• Vix 13.6 -4.3%
• Total Put/Call .83 -25.2%
• TRIN/Arms 1.52 +112.9%

Tuesday Watch

Evening Headlines

Bloomberg:  

• Italy's Populist Leader Stakes Claim to Be Trump's Man in Europe.  

• North Korea Is Working on New Missiles, Report Says.

• Asia Stocks to Slip After Tech Rout; Dollar Falls. Asian futures pointed to a weaker open after the biggest technology shares led a retreat in U.S. stocks amid signs of investor fatigue with the sector. Government bonds declined ahead of a slew of central bank meetings. Futures on equity benchmarks in Japan, Hong Kong and Australia were all down. The Nasdaq Composite Index sank 1.4 percent, while losses on the S&P 500 Index were tempered by gains in banks and oil producers. The FANG cohort of tech megacaps tumbled almost 3 percent, led by Netflix Inc., leaving the group down more than 9 percent since Facebook Inc.’s disappointing earnings results last week. A retreat in the dollar helped oil climb past $70 a barrel. Futures on the Nikkei 225 Stock Average fell 0.2 percent in Singapore. Futures on the S&P/ASX 200 Index were less than 0.05 percent lower. Hong Kong’s Hang Seng Index futures declined 0.1 percent. S&P 500 Index futures rose less than 0.1 percent as of 7:06 a.m. in Tokyo.

• Five Things You Need to Know to Start Your Day.   

• Oil Rises Most in a Month Amid Heightened Worldwide Supply Risks.

• Mid-Cap Stocks Still Have Room to Run as ‘M&A Effect’ Kicks In. 

• Investors Penalize S&P 500 Earnings Misses the Most Since 2016.  

• Treasury Sees Second-Half U.S. Borrowing at Most Since 2008.

Wall Street Journal:

• An Inverted Yield Curve May Not Portend Doom.

• What Duluth Can Teach America About Declining Political Civility.

• Trump Willing to Meet Iran’s President With No Conditions. 

• American Express(AXP) Gave Clients One Rate, Then Secretly Raised It.

• Goldman Partners’ Haul on Crisis-Era Options: $3 Billion.

• Mexico’s Murder Rate Hits Highest Level in Decades.

MarketWatch.com:

• Trump administration weighs $100-billion tax break for capital gains.

Fox News:

• Kavanaugh meets with swing-vote Sen. Manchin, clearing way for possible left-wing support.

• Anti-Trump London mayor takes heat for city’s soaring crime rate.

CNBC: 

• Dimon says Trump's tax cut and deregulation have 'accelerated growth'.

• After-hours buzz: AKS, TXRH & more.

• Pompeo announces $113 million in new US initiatives in 'Indo-Pacific'.

• Tech stocks will regain losses, say financial advisors, so buy during the dip. 

• Activision Blizzard(ATVI) holds first-ever Overwatch League Grand Finals.

Zero Hedge:

• Full BOJ Preview: This One May Be Important

• Sisyphus, Sex, & Socialism: America's 'Demolition Derby' Of A Nation

• Chipotle Stock Slumps After Ohio Store Closure Over Alleged Food Poisoning

• MH370 Mystery Remains Unsolved Even As Probe Finds Controls "Manipulated"

• Stocks, Bonds, Dollar Dumped On Worst FANGover In 30 Months. 

Business Insider:

• Chinese authorities are offering wedding subsidies and cash payments to lure 'high quality' women into having more babies.

• Uber and Lyft are gaining even more market share over taxis and rentals.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 79.75 +1.0 basis point. 

• Asia Pacific Sovereign CDS Index 11.75 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 70.12 -.01%.

• FTSE 100 futures -.22%

• S&P 500 futures +.07%.

• NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AGCO)/1.28

• (APTV)/1.36

• (AMT)/1.64

• (ADM)/.77

• (BP)/.14

• (CMI)/3.66

• (ETN)/1.32

• (FDP)/1.27

• (HMC)/115.26

• (IGT)/.36

• (PFE)/.74

• (RL)/1.36

• (SNE)/74.56

• (VMC)/1.35

After the Close:

• (APC)/.58

• (AAPL)/2.18

• (BIDU)/2.59

• (CAKE)/.81

• (PZZA)/.55

• (SMG)/2.58

• (ZEN)/.00

Economic Releases 
8:30 am EST

• Personal Income for June is estimated to rise +.4% versus a +.4% gain in May.

• Personal Spending for June is estimated to rise +.4% versus a +.3% gain in May.

• The PCE Core MoM for June is estimated to rise +.1% versus a +.2% gain in May.

• The Employment Cost Index for 2Q is estimated to rise +.7% versus a +.8% gain in 1Q.

9:00 am EST

• The S&P CoreLogic CS 20-City MoM for May is estimated to rise +.2% versus a +.2% gain in April.
  

9:45 am EST

• The Chicago Purchasing Manager Index for July is estimated to fall to 62.0 versus a reading of 64.1 in June.

10:00 am EST

• The Conference Board Consumer Confidence Index for July is estimated to fall to 126.0 versus 126.4 in June.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Manufacturing PMI report, Eurozone GDP report, Eurozone CPI report, weekly US retail sales reports and the Keefe Bruyette Woods Community Bank Conference could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Falling into Afternoon on Trade War Worries, Emerging Markets Debt Angst, Profit-Taking, Tech/Biotech Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.8 +5.8%

• Euro/Yen Carry Return Index 135.29 +.48%

• Emerging Markets Currency Volatility(VXY) 10.13 +1.0%

• S&P 500 Implied Correlation 30.79 -1.19%

• ISE Sentiment Index 78.0 -17.0%
  

• Total Put/Call .97 -6.7%

• NYSE Arms .78 +5.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.02 +1.55%
  

• America Energy Sector High-Yield CDS Index 361.0 -1.52%

• European Financial Sector CDS Index 76.74 +2.95%

• Italian/German 10Y Yld Spread 234.0 -.25 basis point
  

• Asia Pacific Sovereign Debt CDS Index 11.80 -1.21%

• Emerging Market CDS Index 166.16 +1.82%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.93 +.26%

• 2-Year Swap Spread 20.75 +.75 basis point

• TED Spread 35.0 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -6.0 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.13 +.18%
• 3-Month T-Bill Yield 1.99% unch.
  

• Yield Curve 29.75 +1.0 basis point

• China Iron Ore Spot 67.53 USD/Metric Tonne +.40%

• Citi US Economic Surprise Index -3.30 +1.8 points

• Citi Eurozone Economic Surprise Index -27.70 -4.1 points

• Citi Emerging Markets Economic Surprise Index .6 +1.3 points

• 10-Year TIPS Spread 2.13 +1.0 basis point
  
• 80.3% chance of Fed rate hike at Sept. 26th meeting, 81.4% chance at November 8th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -29 open in Japan 
• China A50 Futures: Indicating +20 open in China

• DAX Futures: Indicating -17 open in Germany

Portfolio: 

• Slightly Lower: On losses in my tech/biotech/medical sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.1%

Sector Underperformers:

• 1) Internet -2.7% 2) Software -2.5% 3) Disk Drives -1.7%

Stocks Falling on Unusual Volume: 

• PDD, SOHU, TMST, USFD, TSN, AXGN, FB, YRD, CVRR, TAL, EA, EXP, TWTR, ARWR, TTWO, NBIX, MDGL and PI

Stocks With Unusual Put Option Activity:

• 1) TSN 2) EXAS 3) CBS 4) W 5) SNAP

Stocks With Most Negative News Mentions:

• 1) SNCR 2) TAL 3) TSN 4) ALK 5) NRG

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%

Sector Outperformers:

• 1) Oil Service +2.0% 2) Paper +1.2% 3) Telecom +1.2%

Stocks Rising on Unusual Volume:

• AWX, TRTN, BPI, GLPG, ASTE, HABT, GT, ULH, VOD, EYE, TOT, CAT, BMCH, MCS, NUVA, LOGM, BGSF, FDC, AMD, MTH, BLDR, TORC, HTZ, NOV, WRK, MCY, LBRT, DO, AMG, KBR, HIIQ, OII, VCYT and LAD

Stocks With Unusual Call Option Activity:

• 1) CBS 2) FLEX 3) PE 4) ETN 5) EXC

Stocks With Most Positive News Mentions:

• 1) HABT 2) AMG 3) CAR 4) T 5) MCD

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume