Morning Market Internals

NYSE Composite Index:

• Volume Running -2.6% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 46.5% of Issues Advancing, 50.1% Declining
• 61 New 52-Week Highs, 33 New Lows
• 48.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.5%
• Vix 12.9 +3.3%
• Total Put/Call .90 +5.9%
• TRIN/Arms 2.2 +74.0%

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 75.5 -.25 basis point. 
• Asia Pacific Sovereign CDS Index 12.25 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 71.02 -.12%.
• FTSE 100 futures +.41%.
• S&P 500 futures +.32%.
• NASDAQ 100 futures +.60%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (BKE)/.36
• (CAE)/.32
• (FL)/1.24
• (HIBB)/1.14

After the Close:

• None of note

Economic Releases
8:30 am EST

• Durable Goods Orders for April is estimated to fall -1.3% versus a +2.6% gain in March.
• Durables Ex Transports for April is estimated to rise +.5% versus a +.1% gain in March.
• Cap Goods Orders Non-Defense Ex Air for April is estimated to rise +.7% versus a -.4% decline in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kaplan speaking, Fed's Bostic speaking, Fed's Evans speaking, German IFO and the (EFX) investor meeting could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer and energy shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.

Stocks Slightly Lower into Final Hour on Trade War Worries, Geopolitical Tensions, Oil Decline, Energy/Telecom Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.74 +1.27%

• Euro/Yen Carry Return Index 133.45 -.46%

• Emerging Markets Currency Volatility(VXY) 9.1 -.65%

• S&P 500 Implied Correlation 34.86 -.31%

• ISE Sentiment Index 99.0 +6.45%
  

• Total Put/Call .84 -15.15%

• NYSE Arms 1.21 -7.19%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.19 +.60%
  

• America Energy Sector High-Yield CDS Index 358.0 +.86%

• European Financial Sector CDS Index 70.97 +2.17%

• Italian/German 10Y Yld Spread 192.75 +3.5 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.31 -1.05%

• Emerging Market CDS Index 158.69 +1.32%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.49 -.04%

• 2-Year Swap Spread 23.25 +.75 basis point

• TED Spread 43.5 +2.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -12.75 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.12 -.29%
• 3-Month T-Bill Yield 1.89% -2.0 basis points
  

• Yield Curve 47.25 -.5 basis point

• China Iron Ore Spot 65.15 USD/Metric Tonne +1.18%

• Citi US Economic Surprise Index 8.0 -1.8 points

• Citi Eurozone Economic Surprise Index -98.20 +.6 point

• Citi Emerging Markets Economic Surprise Index -6.50 -.5 point

• 10-Year TIPS Spread 2.14 -1.0 basis point
  
• 100.0% chance of Fed rate hike at August 1 meeting, 100.0% chance at September 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -152  open in Japan 
• China A50 Futures: Indicating +7 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio: 

• Higher: On gains in my medical/retail/industrial/tech sector longs and my emerging market shorts

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

• Market Exposure: Moved to 100% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.6% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 42.0% of Issues Advancing, 55.1% Declining
• 38 New 52-Week Highs, 42 New Lows
• 48.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.3%
• Vix 13.5 +7.2%
• Total Put/Call .85 -14.1%
• TRIN/Arms 1.28 -1.99%

Thursday Watch

Night Trading 

• Asian equity indices are -.75% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.75 +.75 basis point. 

• Asia Pacific Sovereign CDS Index 12.5 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 71.29 -.06%.

• FTSE 100 futures +.12%.

• S&P 500 futures -.18%.

• NASDAQ 100 futures -.23%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BBY)/.74

• (HRL)/.45

• (MCK)/3.57

• (MDT)/1.39

• (SAFM)/2.31

• (TTC)/1.18

• (TD)/1.50

After the Close:

• (ADSK)/.03

• (DECK)/.19

• (GPS)/.46

• (NTNX)/-.19

• (QSII)/.13

• (ROST)/1.07

• (SCVL)/.71

• (SPLK)/-.09

• (ZOES)/-.02

Economic Releases
8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 220K versus 222K the prior week.

• Continuing Claims are estimated to rise to 1746K versus 1707K the prior week.

9:00 am EST

• The 1Q House Price Purchase Index is estimated to rise +.7% versus a +1.6% gain in 4Q.

• The FHFA House Price Index MoM for March is estimated to rise +.6% versus a +.6% gain in 4Q.
  

10:00 am EST

• Existing Home Sales for April are estimated to fall to 5.55M versus 5.6M in March.
  

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for May is estimated to fall to 20.0 versus 26.0 in April.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Harker speaking, $20B 7Y T-Note auction, German GDP report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (DB) annual meeting, (PYPL) investor day, (CBT) investor day and the HSBC Luxury Goods Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer and financial 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 Reversing Slightly Higher into Final Hour on Lower Long-Term Rates, Earnings Optimism, Technical Buying, Homebuilding/REIT Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.9 -2.8%

• Euro/Yen Carry Return Index 134.1 -1.4%

• Emerging Markets Currency Volatility(VXY) 9.3 +4.3%

• S&P 500 Implied Correlation 35.45 -.51%

• ISE Sentiment Index 92.0 -32.1%
  

• Total Put/Call .97 +16.9%

• NYSE Arms 1.28 +26.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 61.73 +.13%
  

• America Energy Sector High-Yield CDS Index 354.0 +1.42%

• European Financial Sector CDS Index 69.46 +2.74%

• Italian/German 10Y Yld Spread 189.25 +12.5 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.45 +1.26%

• Emerging Market CDS Index 156.65 -4.46%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.55 +.01%

• 2-Year Swap Spread 22.5 -1.0 basis point

• TED Spread 40.75 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.25 -2.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.35 +.07%
• 3-Month T-Bill Yield 1.91% -2.0 basis points
  

• Yield Curve 47.75 -2.0 basis points

• China Iron Ore Spot 63.85 USD/Metric Tonne -.13%

• Citi US Economic Surprise Index 9.80 -1.1 points

• Citi Eurozone Economic Surprise Index -98.80 -19.0 points

• Citi Emerging Markets Economic Surprise Index -6.0 -.4 point

• 10-Year TIPS Spread 2.15 -3.0 basis points
  
• 100.0% chance of Fed rate hike at August 1 meeting, 100.0% chance at September 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -89  open in Japan 
• China A50 Futures: Indicating +14 open in China

• DAX Futures: Indicating +32 open in Germany

Portfolio: 

• Higher: On gains in my medical/retail/biotech/tech sector longs and my emerging market shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts

• Market Exposure: Moved to 75% Net Long