Stocks Higher into Final Hour on Trump Speech, Global Central Bank Hopes, Technical Buying, Gaming/Airline Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.8 -2.7%
• Bloomberg Global Risk On/Risk Off Index 555.0 +77.0 points

• Euro/Yen Carry Return Index 129.86 -.53%

• Emerging Markets Currency Volatility(VXY) 11.03 -.63%

• S&P 500 Implied Correlation 37.4 -1.7%

• ISE Sentiment Index 124.0 +22.0 points

• Total Put/Call .66 +6.5%

• NYSE Arms .66 -22.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.12 -.63%
  

• US Energy High-Yield OAS 760.65 +.25%

• European Financial Sector CDS Index 61.30 +1.66%

• Italian/German 10Y Yld Spread 143.5 +.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index  62.07 -.08%
  

• Emerging Market CDS Index 175.25 -2.9%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.58 +.04%

• 2-Year Swap Spread 9.0 +.25 basis point

• TED Spread 16.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread  93.5 +3.25 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.83 +1.12%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 61.5 +8.5 basis points
  

• China Iron Ore Spot 119.70 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index 242.50 -.3 point

• Citi Eurozone Economic Surprise Index 151.9 +5.9 points

• Citi Emerging Markets Economic Surprise Index 25.0 +.4 point

• 10-Year TIPS Spread 1.77 +3.0 basis points
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -12 open in Japan 
• China A50 Futures: Indicating -58 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/consumer staple/tech sector longs
  

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

• Market Exposure: Moved to 75% Net Long

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -31.3% Below 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 53.2% of Issues Advancing, 43.7% Declining
• 47 New 52-Week Highs, 8 New Lows
• 47.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0% 
• Bloomberg Global Risk-On/Risk-Off Index 406.0 -72.0 points
• Vix 25.9 +5.7%
• Total Put/Call .50 -19.4%
• TRIN/Arms .73 +1.4%

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 62.75 +.5 basis point.

• China Sovereign CDS 35.75 unch.

• Bloomberg Emerging Markets Currency Index 60.16 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 465.0 -12.0 points
• Volatility Index(VIX) futures 26.9 -.46%
• FTSE 100 futures +.17%.

• S&P 500 futures +.20%.

• NASDAQ 100 futures +.14%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BIG)/2.70
• (HIBB)/1.15
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance report for July is estimated to widen to -$72.0B versus -$70.6B in June.
• Wholesale Inventories MoM for July is estimated to fall -.9% versus a -1.4% decline in June.
• Retail Inventories MoM for July is estimated to fall -1.1% versus a -2.6% decline in June.
• Personal Income for July is estimated to fall -.4% versus a -1.1% decline in June.
• Personal Spending for July is estimated to rise +1.5% versus a +5.6% gain in June.
• The PCE Core MoM for July is estimated to rise +.5% versus a +.2% gain in June.
  

9:45 am EST

• The MNI Chicago PMI for August is estimated to rise to 52.6 versus 51.9 in July.
  

Upcoming Splits

• (AAPL)/4-for-1
• (TSLA)/5-for-1
  

Other Potential Market Movers

• The Fed's Bullard speaking, Fed's Harker speaking, Fed's Mester speaking and the GFK Consumer Confidence Index could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

Stocks Higher into Afternoon on Central Bank Hopes, Diminishing Coronavirus Fears, Technical Buying, Financial/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.4 +4.9%
• Bloomberg Global Risk On/Risk Off Index 568.0 -45.0 points

• Euro/Yen Carry Return Index 130.63 +.54%

• Emerging Markets Currency Volatility(VXY) 11.13 -.45%

• S&P 500 Implied Correlation 38.48 +1.29%

• ISE Sentiment Index 102.0 -28.0 points

• Total Put/Call .61 -6.15%

• NYSE Arms .83 -23.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.28 +.94%
  

• US Energy High-Yield OAS 761.09 -.61%

• European Financial Sector CDS Index 60.30 -1.69%

• Italian/German 10Y Yld Spread 143.25 -1.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  62.29 +.37%
  

• Emerging Market CDS Index 181.22 +.98%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.51 +.01%

• 2-Year Swap Spread 8.75 +.75 basis point

• TED Spread 16.0 +2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -1.5 basis points
  
• MBS  5/10 Treasury Spread  90.25 unch.
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.18 +.15%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 53.0 -2.0 basis points
  

• China Iron Ore Spot 118.0 USD/Metric Tonne -1.20%

• Citi US Economic Surprise Index 242.80 +4.7 points

• Citi Eurozone Economic Surprise Index 146.0 +2.3 points

• Citi Emerging Markets Economic Surprise Index 24.6 -.3 point

• 10-Year TIPS Spread 1.74 +1.0 basis point
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +12 open in Japan 
• China A50 Futures: Indicating -26 open in China

• DAX Futures: Indicating -25 open in Germany

Portfolio:

• Higher: On gains in my medical/industrial/consumer staple/biotech sector longs and emerging market shorts
  

• Disclosed Trades: None

• Market Exposure: 50% Net Long

 

Bear Radar

Style Underperformer:

• Small-Cap Growth -.8%

Sector Underperformers:

• 1) Gold & Silver -2.4% 2) Shipping -2.3% 3) Semis -1.8%

Stocks Falling on Unusual Volume: 

• OOMA, LCA, PSNL, LRCX, BIGC, INSP, BAND, EXAS, FB, AMAT, FFIV, IIVI, PLAB, FFIV, IIVI, ADBE, PKI, PANW, BIGC, NFLX, FTNT, OMER, URBN, HFC, APPS, SMTC, NLS, LRN, SWTX, CUTR, EBS, ACMR, CUE, UCTT, PASG, DLTR, SWBI, SHLL, HOLX, WSM, CCH, EIGR, IMUX, DGX, MAXR, SPWH, VIVO, ECOM, VIVO, LMNX, CODX, OSTK, GNMK, SPWR, OSUR, FLGT and QDEL
  

Stocks With Unusual Put Option Activity:

• 1) DLTR 2) WDAY 3) FLR 4) SPLK 5) GPS
  

Stocks With Most Negative News Mentions:

• 1) DGX 2) QDEL 3) HOLX 4) BILI  5) KODK
  

Charts:

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

 

Bull Radar

Style Outperformer:

• Large-Cap Value +.3%

Sector Outperformers:

• 1) Airlines +3.1% 2) Gaming +2.3% 3) Banks +1.9%

Stocks Rising on Unusual Volume:

• BMCH, DPHC, ANF, BL, LYV, BOX, BLDR, ABT, SIX, GRWG, PLAN, BYND, WMT, FSLY and SHAK
  

Stocks With Unusual Call Option Activity:

• 1) DGLY 2) ABT 3) ANF 4) SIRI 5) QDEL

Stocks With Most Positive News Mentions:

• 1) VNE 2) PLAN 3) EV 4) ANF 5) NTAP

Charts:

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