Bull Radar

Style Outperformer:

• Large-Cap Value +.4%

Sector Outperformers:

• 1) Oil Service +3.6% 2) Energy +1.6% 3) Defense +1.0%

Stocks Rising on Unusual Volume:

• GBT, CARA, AVAV, WWE, EGAN, I, IHG, E, LGCYO, CSII, LN, WRD, FOX, EROS, EQNR, BP, GE, FOXA, CNQ, DO, RIG, AIZ, BHP, DSLV, CSII and GBT

Stocks With Unusual Call Option Activity:

• 1) KKR 2) CARA 3) GBT 4) WWE 5) CLR

Stocks With Most Positive News Mentions:

• 1) CARA 2) GBT 3) WWE 4) WCG 5) REGN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +12.1% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 63.0% of Issues Advancing, 32.5% Declining
• 31 New 52-Week Highs, 49 New Lows
• 46.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.9%
• Vix 15.2 -4.7%
• Total Put/Call .78 -14.3%
• TRIN/Arms .63 -36.0%

Wednesday Watch

Evening Headlines

Bloomberg: 

• Trump Signals He Favors Less Confrontation With China on Tech.

• Senate Considers Ways to Limit Trump's Authority on Tariffs.

• China's Role as Market Anchor at Risk With Rapid Yuan Slide.

• China Beige Book Says Economy Is Better Than Official Data Show.

• Asian Stocks Set for Mixed Start; Oil Rallies. Asian stocks headed for a muted start to trading Wednesday after a rally in U.S. oil stocks helped the S&P 500 close higher even as concerns linger over the impact of potential global trade restrictions. Chinese assets will be in the spotlight again with both the currency and stocks under pressure. Futures for equity indexes in Japan and Hong Kong were little changed after the S&P 500 Index climbed back above its average level over the past 50 days. Energy companies led gains in American shares after oil rose above $70 a barrel following reports the U.S. is pressing allies to halt imports of Iranian crude. The dollar jumped versus major peers and Treasuries steadied after recent gains. Futures on Japan’s Nikkei 225 were trading close to the level seen at the close of the cash equity market in Tokyo Tuesday. Futures on Hong Kong’s Hang Seng Index added 0.1 percent.   

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

• Crypto Collapse Spreads With Hundreds of Coins Plunging in Value.   

• Facebook(FB) to Change Political Ad Rules After Blowback From Media.  

• It’s Been a Rough 2018 for Many Quant Hedge Funds.

Wall Street Journal:

• High Court Upholds Trump Travel Ban. 

• ObamaCare Can Be Worse Than Medicaid.

• Immigration Backlash in Bavaria Erodes Merkel’s Power.

• U.S. Signals Sanctions for All Imports of Iranian Oil.

• Trump Eases Demand for Tools to Limit Chinese Investment.

• Small Towns Are Booming, Thanks to Rising Oil Prices.

• Demand Rises for Furnished Rental Apartments.

• Has the Big Yuan Short Finally Arrived?

MarketWatch.com:

• Forget the tariff tantrum—S&P 500 is headed 10% higher in 2018, says Blackstone’s Wien.

• Five outperforming health-care funds and the top 10 stocks they hold.

• These top-rated funds reveal some of the world’s hottest tech stocks.

Fox News:

• FBI agent expected to face Hill grilling over anti-Trump texts with lover.

• BRIT HUME: Maxine Waters needs to keep a civil tongue and so do we all.

CNBC:      

• Missile defense agency director on hypersonic weapons: 'It's real, it's coming, it's a matter of time'.

• Trump threatens Harley-Davidson: If it moves overseas 'they will be taxed like never before!' 

• Stocks making biggest moves after hours: Sonic, AeroVironment and more.  

• Goldman reiterates sell on Tesla and expects Model 3 deliveries to miss estimates.

• Gallup poll: Nancy Pelosi's favorability rating falls to 9-year low among Democrats.

Zero Hedge:

• "You Are Unbalanced": Hungarian Foreign Minister Shuts Down Enraged BBC Reporter Over EU Migration.

• DOJ Won't Release Top Secret Loretta Lynch Intercepts Suggesting Secret Deal To Rig Clinton Probe.

• In "Catastrophic" Scenario, CBO Projects US Debt/GDP Hitting 247%.

• 18 Democrats Sue Trump To Reunite Immigrant Families.

• IMF Sounds The Alarm Over Junk Bonds.

• Mike Bloomberg Weighing 2020 Democratic Presidential Run. 

• WTI Extends Gains After Biggest Crude Draw Since Sept 2016.

• US Dead-Cat-Bounce Fades As 'Weaponized' Yuan Tumbles.

Business Insider:

• 9 rival tech companies are working together to prevent Amazon from landing a $10 billion cloud contract.

• 'His legacy is tarnished': The big shake-up at GE is a direct challenge to former CEO Jeff Immelt's most prized achievements. 

• An outage in Canada is raising the risk of a global oil shortage.

• Housing prices are rising in the US — but home-buying power isn't slowing down.

• Robots are already working in fast-food restaurants — here's exactly what they're doing right now.

Night Trading 

• Asian equity indices are unch. to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 86.0 +.25 basis point. 

• Asia Pacific Sovereign CDS Index 14.0 unch.

• Bloomberg Emerging Markets Currency Index 69.77 unch.

• FTSE 100 futures +.25%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (GIS)/.72

• (PAYX)/.62

After the Close:

• (BBBY)/.32

• (CAMP)/.28

• (FUL)/.85

• (PIR)/-.39

• (PRGS)/.53

• (RAD)/-.01

• (WOR)/1.04

Economic Releases

8:30 am EST

• Wholesale Inventories MoM for May are estimated to rise +.2% versus a +.1% gain in April.

• Advance Goods Trade Balance for May is estimated at -$69.0B versus -$67.3B in April. 

• Durable Goods Orders for May are estimated to fall -1.0% versus a -1.6% decline in April.

• Durables Ex Transports for May are estimated to rise +.5% versus a +.9% gain in April.

• Cap Goods Orders Non-Defense Ex-Air for May are estimated to rise +.5% versus a +1.0% gain in April.

10:00 am EST

• Pending Home Sales MoM for May are estimated to rise +.5% versus a -1.3% decline in April.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,219,830 barrels versus a -5,914,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,132,670 barrels versus a +3,277,000 barrel decline the prior week. Distillate inventories are estimated to rise by +1,062,420 barrels versus a +2,715,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.09% versus a +1.0% gain prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Rosengren speaking, Fed's Quarles speaking, Japan retail trade report, $36B 5Y T-Note auction, weekly MBA Mortgage Applications report, (CMG) investor call, (MNKD) investor meeting and the (LEA) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology 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 Rising into Final Hour on Diminished Trade War Fears, Yen Weakness, Oil Gain, Energy/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.5 -10.7%

• Euro/Yen Carry Return Index 133.50 -.09%

• Emerging Markets Currency Volatility(VXY) 9.55 -.42%

• S&P 500 Implied Correlation 37.80 -2.22%

• ISE Sentiment Index 153.0 +35.4%
  

• Total Put/Call .91 -17.3%

• NYSE Arms .91 -22.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.04 -.48%
  

• America Energy Sector High-Yield CDS Index 403.0 +.38%

• European Financial Sector CDS Index 88.24 +.65%

• Italian/German 10Y Yld Spread 254.75 +5.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 14.06 +.11%

• Emerging Market CDS Index 184.74 -.88%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.37 -.09%

• 2-Year Swap Spread 26.0 -.5 basis point

• TED Spread 42.0 -2.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.80 -.1%

• 3-Month T-Bill Yield 1.92% +3.0 basis points
  

• Yield Curve 35.0 +.25 basis point

• China Iron Ore Spot 64.0 USD/Metric Tonne +.19%

• Citi US Economic Surprise Index 3.50 +.2 point

• Citi Eurozone Economic Surprise Index -65.20 +.8 point

• Citi Emerging Markets Economic Surprise Index -13.0 +2.6 points

• 10-Year TIPS Spread 2.13 +1.0 basis point
  

• 78.8% chance of Fed rate hike at Sept. 26th meeting, 80.0% chance at November 8th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +23 open in Japan 

• China A50 Futures: Indicating -40 open in China

• DAX Futures: Indicating +58 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

•   Large-Cap Value +.4%

Sector Underperformers:

• 1) Airlines -.7% 2) Shipping -.5% 3) Biotech -.3%

Stocks Falling on Unusual Volume: 

• COOL, BVN, INCY, HTZ and TREE

Stocks With Unusual Put Option Activity:

• 1) CAR 2) PF 3) DUST 4) HMNY 5) TTWO

Stocks With Most Negative News Mentions:

• 1) HTZ 2) INCY 3) COOL 4) CCJ 5) SIRI

Charts:

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