Bull Radar

Style Outperformer:

• Small-Cap Value +1.3%

Sector Outperformers:

• 1) Gaming +2.9% 2) Coal +1.5% 3) Retail +1.3%

Stocks Rising on Unusual Volume:

• AKBA, IRBT, JNPR, LOGI, ARI, TWTR, CMG, WYN, MHO, FOE, CLGX, TSS, EW, MSA, ISLE, PRGO, GCO, MDSO, BOKF, ESRX, PBF, NTB, IRTC, FCAU, HSTM, CONN, ERI, WYNN, BLMN, KMT, FSLR, SIX, TMO, IART, ANTM, TRN, DECK, ILG, TKR, GCO, BAX, AI, BIG, STRP and CZR

Stocks With Unusual Call Option Activity:

• 1) JNPR 2) ST 3) UPS 4) MRK 5) UTX

Stocks With Most Positive News Mentions:

• 1) WYNN 2) COST 3) DNOW 4) DYN 5) EAT

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +22.0% Above 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 64.8% of Issues Advancing, 31.6% Declining
• 172 New 52-Week Highs, 7 New Lows
• 58.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.8%
• Vix 10.62 -1.3%
• Total Put/Call .64 -21.0%
• TRIN/Arms .88 -3.01%

Wednesday Watch

Night Trading 

• Asian equity indices are +.25% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 93.25 -2.0 basis points. 
• Asia Pacific Sovereign CDS Index 22.75 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 72.68 +.02%.
• S&P 500 futures +.03%. 
• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ALK)/1.04
• (BAX)/.51
• (BA)/1.91
• (DPS)/.97
• (GD)/2.32
• (HES)/-1.07
• (IR)/.53
• (NSC)/1.36
• (NOC)/2.92
• (OC)/.61
• (PEP)/.92
• (PG)/.94
• (STX)/1.07
• (STT)/1.10
• (SUP)/.37
• (TWTR)/.01
• (UTX)/1.39
• (WYN)/1.10
• (BWLD)/1.67
• (FFIV)/1.97
• (GG)/.09
• (LVS)/.62
• (ORLY)/2.88
• (TER)/.38
• (TSCO)/.46
• (XLNX)/.54

Economic Releases  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,135,910 barrels versus a -1,034,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +140,450 barrels versus a +1,542,000 barrel gain the prior week. Distillate supplies are estimated to fall by -1,278,180 barrels versus a -1,955,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.11% versus a +1.9% gain the prior week.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Australia CPI report, President Trump's tax reform plan outline, FCC Chair speaking on internet regs, $34B 5Y T-Note auction, weekly MBA mortgage applications report, (BAC) annual meeting and the (AMD) annual meeting could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by commodity and industrial 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.

Stocks Surging into Final Hour on Tax Reform Hopes, Earnings Optimism, Yen Weakness, Financial/Restaurant Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 10.79 -.46%

• Euro/Yen Carry Return Index 126.82 +1.79%

• Emerging Markets Currency Volatility(VXY) 8.52 -.53%

• S&P 500 Implied Correlation 41.53 -.41%

• ISE Sentiment Index 96.0 +14.3%
  

• Total Put/Call .82 -21.90%

• NYSE Arms 1.12 +43.69%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.73 -3.30%
  

• America Energy Sector High-Yield CDS Index 375.0 +1.44%

• European Financial Sector CDS Index 74.48 -4.48%

• Western Europe Sovereign Debt CDS Index 9.24 -3.35%

• Asia Pacific Sovereign Debt CDS Index 22.86 -.74%

• Emerging Market CDS Index 197.84 -1.25%
  

• iBoxx Offshore RMB China Corporate High Yield Index 137.13 +.09%

• 2-Year Swap Spread 33.0 -.25 basis point

• TED Spread 36.50 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -26.25 +.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.65 -.08%
• 3-Month T-Bill Yield .81% +3.0 basis points
  

• Yield Curve 106.0 +1.0 basis point
  

• China Import Iron Ore Spot $66.07/Metric Tonne -.69%

• Citi US Economic Surprise Index 7.30 +6.5 points

• Citi Eurozone Economic Surprise Index 50.90 -.5 point

• Citi Emerging Markets Economic Surprise Index 38.6 +1.2 points

• 10-Year TIPS Spread 1.92 +4.0 basis points
  
• 69.7% chance of Fed rate hike at June 14 meeting, 72.6% chance at July 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +186 open in Japan 
• China A50 Futures: Indicating +8 open in China

• DAX Futures: Indicating +40 open in Germany

Portfolio: 

• Higher: On gains in my biotech/retail/tech/medical sector longs 

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• Euro Area’s Budding Recovery May Be Almost Ready to Blossom. It’s looking good for the euro area right now and there’s every chance that’s how it will stay. Germany, the region’s largest economy, started the week off with a surge in business confidence, while Tuesday saw French manufacturing sentiment rise to a six-year high. With a damaging outcome in that country’s presidential elections seen as largely out of the way, the region’s top two economies might have just the environment they need to fully blossom.
• World’s Biggest Stock Markets Haven’t Been This Split Since 2008. (video)
• Betting Worst Is Over, Steelmakers Spending Again After Cuts. After years of losses, plant closings and job cuts, some of the world’s biggest steelmakers are ready to spend more on their businesses. Combined capital expenditure planned this year by top producer ArcelorMittal, South Korea’s Posco and Russia’s Novolipetsk Steel PJSC will be up 29 percent to $6.7 billion in 2017, the first increase since 2014, according to estimates by the companies. Increases also are planned by some American and European companies, including U.S. Steel Corp. and Thyssenkrupp AG. Investments will mostly be targeted at expansions in key markets and new technologies.
• Volvo AB Shares Hit 10-Year High on Construction-Equipment Sales. (video) The stock rose as much as 7.6 percent to 144 kronor, the highest intraday price since July 24, 2007, and was up 6 percent at 9:39 a.m. in Stockholm. Adjusted operating profit climbed to 7.03 billion kronor ($798 million). Orders for commercial vehicles and machinery for construction sites and mining also gained, Gothenburg, Sweden-based Volvo said Tuesday in a statement, boding well for future revenue.
• Perry Says Trump Should Keep Paris Climate Deal and Renegotiate. (video) U.S. Energy Secretary Rick Perry said the U.S. should renegotiate the Paris accord on climate change instead of abandoning it, criticizing Germany for allowing its fossil-fuel emissions to rise. “I’m not going to tell the president of the United States to walk away form Paris accord,” Perry said at the Bloomberg New Energy Finance conference in New York on Tuesday. “I will say that we need to renegotiate it.”
• Netflix(NFLX) in Talks to License Shows in China to Baidu's IQiyi.

Wall Street Journal:

• Bank of Japan Sends Message: Don’t Expect Higher Rates. Bank officials worry that prices aren’t recovering as quickly as the broader economy. 
• Where College Seniors Are Falling Short. Expected graduates are ill-prepared for the job hunt and many coveted positions, a survey finds.

Fox News: 

• First 100 days: Trump team touts number of Obama rules they killed. (video)
• Turkish jets bomb US-backed forces in Iraq, Syria, US officials say. (video)
• North Korea reportedly holds live-fire drill as US nuclear-powered sub approaches. (video)

CNBC: 

• This chart shows the rally may have a lot more room to run. (video)
• Janet Yellen's successor at the Fed just might be Gary Cohn. (video)

Zero Hedge:

• Here We Go Again: Another Futures Fund Is Caught In A "Short Gamma" Trap.
• Neil Ty - The Scientism Guy. (video)
• An Angry Canada Responds To Trump's Lumber Tariff... And What It Means For The Economy.
• Einhorn: "The Longs Say Stocks Can Only Go Up, Seemingly To Infinity And Beyond. We Have Seen This Before". 
• Ivanka Trump Booed At Women's Conference In Berlin. (video)
• Consumer Confidence Stumbles As Stock Market Optimism Plunges Most In 15 Months. (graph)
• New Home Sales Jump, Tied For Highest Since 2008 As Median Selling Price Rebounds. (graph)
• EURUSD Spikes Above 1.09 After Reuters Telegraphs ECB Hawkish Turn.
• US Home Prices Rise At The Fastest Pace Since July 2014. (graph)
• Caterpillar(CAT), McDonalds(MCD) Shares Surge After Smashing Estimates
• Marissa Mayer To Leave Yahoo With $186 Million From Verizon(VZ) Deal.

Business Insider: 

• Tyson Foods(TSN) is buying packaged-food maker AdvancePierre for $3.2 billion.
• 'Wells Fargo(WFC) has been out of order for years!': Wells Fargo's shareholder meeting gets rowdy.

The Telegraph:

• Euro survives existential drama, but France remains ungovernable.

Bear Radar

Style Underperformer:

• Mid-Cap Value +.9%

Sector Underperformers:

• 1) Gold & Silver -3.6% 2) Homebuilders -1.2% 3) Utilities -.2%

Stocks Falling on Unusual Volume: 

• NGL, ESRX, R, NLSN, ABX, PHM, KPTI, ST, TROW, MAG and CDNS

Stocks With Unusual Put Option Activity:

• 1) ESRX 2) OPK 3) T 4) FTR 5) HUM

Stocks With Most Negative News Mentions:

• 1) HTLF 2) CAG 3) ORLY 4) DYN 5) FCN

Charts:

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