Tuesday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 78.0 -2.0 basis points. 
• Asia Pacific Sovereign CDS Index 10.5 unch.
• Bloomberg Emerging Markets Currency Index 66.86 -.04%.
• FTSE 100 futures +.55%
• S&P 500 futures +.17%.
• NASDAQ 100 futures +.27%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (BMO)/2.26
• (BBY)/.83
• (BJ)/.30
• (DSW)/.47
• (HAIN)/.26
• (TIF)/1.01

After the Close:

• (HRB)/-.77
• (SCVL)/.55

Economic Releases 
8:30 am EST

• The Advance Goods Trade Balance for July is estimated to widen to -$69.0B versus -$67.9B in June.
• Wholesale Inventories MoM for July are estimated to rise +.2% versus a +.1% gain in June.
• Retail Inventories MoM for July.

9:00 am EST

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

10:00 am EST

• The Richmond Fed Manufacturing Index for August is estimated to fall to 17.0 versus 20.0 in July.
• Conference Board Consumer Confidence for August is estimated to fall to 126.6 versus 127.4 in July. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone M3 Money Supply report, $37B 5Y T-Note auction, AZ Senate primary, weekly US retail sales reports, (HSY) analyst day and the Jefferies Semi/Hardware/Communications Conference could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by industrial and industrial 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 Surging into Final Hour on Diminishing Trade War Fears, Economic Optimism, Technical Buying, Financial/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 12.2 +1.92%

• Euro/Yen Carry Return Index 134.97 +.36%

• Emerging Markets Currency Volatility(VXY) 12.56 unch.

• S&P 500 Implied Correlation 29.09 -.58%

• ISE Sentiment Index 87.0 -25.64%
  

• Total Put/Call .92 -8.91%

• NYSE Arms .61 -42.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 58.86 -1.72%
  

• America Energy Sector High-Yield CDS Index 395.0 -1.2%

• European Financial Sector CDS Index 80.35 -.21%

• Italian/German 10Y Yld Spread 278.0 -2.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.55 -.47%

• Emerging Market CDS Index 205.44 -1.86%
  

• iBoxx Offshore RMB China Corporate High Yield Index 151.18 +.07%

• 2-Year Swap Spread 18.25 +.25 basis point

• TED Spread 21.75 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.90 -.04%
• 3-Month T-Bill Yield 2.10% +1.0 basis point

• Yield Curve 20.50 +.5 basis point

• China Iron Ore Spot 65.78 USD/Metric Tonne +.17%

• Citi US Economic Surprise Index -20.90 -1.7 points

• Citi Eurozone Economic Surprise Index 5.20 +10.2 points

• Citi Emerging Markets Economic Surprise Index -9.50 +.2 point

• 10-Year TIPS Spread 2.11 +2.0 basis points
  
• 97.0% chance of Fed rate hike at Nov. 8th meeting, 99.1% chance at Dec. 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +96 open in Japan 
• China A50 Futures: Indicating +28 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +.1%

Sector Underperformers:

• 1) Utilities -.6% 2) Retail -.4% 3) REITs -.3%

Stocks Falling on Unusual Volume: 

• FANH, AIMC, PEB, GME, IRDM and VRNS

Stocks With Unusual Put Option Activity:

• 1) AAL 2) VTL 3) CHS 4) GERN 5) DISCA

Stocks With Most Negative News Mentions:

• 1) BE 2) FANH 3) CMG 4) AEOS 5) HIBB

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.9%

Sector Outperformers:

• 1) Semis +2.3% 2) Steel +2.3% 3) Social Media +2.2%

Stocks Rising on Unusual Volume:

• CRON, UPLD, IEFA, CGC, AMWD, ALNY, ATTU, AMD, EFAV, AHL, PAHC, ZLAB, QTEC, KOP, PDD, SCVL, IIPR, IONS, PAH, TIVO, ESPR, OSB, ZS, HIG, FCAU, SMCI and KSU

Stocks With Unusual Call Option Activity:

• 1) LNG 2) TIF 3) EWJ 4) RH 5) BBY

Stocks With Most Positive News Mentions:

• 1) TLRY 2) ALNY 3) AMD 4) LLNW 5) ESPR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -13.4% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 66.0% of Issues Advancing, 31.0% Declining
• 123 New 52-Week Highs, 10 New Lows
• 55.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.9%
• Vix 12.3 +2.6%
• Total Put/Call .64 -29.7%
• TRIN/Arms .63 -39.9%

Monday Watch

Today's Headlines

Bloomberg:          

• U.S., Mexico Said Poised to Reach Nafta Deal Soon as Monday.

• Londoners Driven From Capital as Home Prices Remain Out of Reach.

• Bond House Calls Time on Australian Debt Amid Political Fracas.

• Powell, Trump and Amazon Effect: What We Heard at Jackson Hole.

• France Set for Economic Growth of 1.7% in 2019 as Cuts Deepen. Asian Stocks Push Higher; Yuan Gains on PBOC Move. Asian stocks started the week with modest gains following a fresh all-time high in their U.S. counterparts Friday, as the Federal Reserve reaffirmed a slow and gradual pace of policy tightening. The yuan extended its advance. Equities rose in Japan and South Korea, and were little changed in Australia, while futures trading from late Friday indicated gains for stocks in Hong Kong and China. The yuan’s gains were spurred by the People’s Bank of China move to restrain the influence of market forces that have been driving the currency lower versus the greenback. The dollar continued to decline and Treasury yields ticked higher. Japan’s Topix index rose 0.5 percent as of 9:12 a.m. in Tokyo. Australia’s S&P/ASX 200 Index slid 0.2 percent. South Korea’s Kospi index rose 0.3 percent. Futures on Hong Kong’s Hang Seng advanced 1 percent. S&P 500 Index futures rose 0.2 percent.

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

Wall Street Journal: 

• Beyond Soda: How and Why Your Beverage Options Are Exploding.

• Signs of a Strong Economy: Hedges Are Overgrown and Lawns Need Mowing.

• The Big Hedge-Fund Strategy That Isn’t Working.

• U.S. Dollar’s Rise Puts Canada, Australia, New Zealand in Spotlight.

• Judge Curbs Trump Orders That Made It Easier to Fire Federal Workers.

• Goldman Cashes In on Passive-Investing Boom.

• At Fed Retreat, Central Bankers Eye New Economic Risks.

MarketWatch.com:

• August is usually a miserable month for stocks, but so far gains have punished the bears.

• Americans are willing to wreck their financial futures on behalf of their pets.

• Another inflation gauge is set to enter the red zone, but no worries at the Fed. Here’s why.

Fox News:

• DAN GAINOR: Mainstream impeachment push could end up helping the GOP.

• 2 in ‘extremist Muslim’ compound plotted to attack hospital, doc shows.

CNBC:

• The longest bull then and now: How financial conditions have changed.

• Trump's approval rating remains stable despite the week's political storm: NBC/WSJ poll.

• Here's why the best time to buy a new car is in the fall.

• US softens its demand for NAFTA 'sunset clause': Mexican official. 

• Goldman: Here are the 10 stocks most loved by hedge funds — including Microsoft.

Zero Hedge:       

• In Stunning Reversal, Michael Cohen's Attorney Backpedals On Trump-Russia Claims.

• 4 Dead, 11 Wounded In Mass Shooting During Madden 2019 Tournament In Jacksonville; One Suspect Dead. 

• Head Of Islamic State In Afghanistan Killed After Spate Of Terror Attacks.

• Illinois Budget Out Of Balance Again. Solution - More Junk Bonds.

• "Terrorist Attack" Manual Targeting Atlanta Hospital Found At New Mexico Jihad Compound.

• Soros' Role In Social Media Censorship Exposed In Leaked Document.

• In "Historic Bombshell", Vatican Official Accuses Pope Francis Of Covering Up Sexual Abuse, Calls For Resignation.

• John McCain Dead At 81.

• North Korea Blasts "Double-Dealing" US After Pompeo's Canceled Trip.

Business Insider:

• How various industries are taking advantage of drones to increase efficiency and cut costs.

• The top 5 startups disrupting healthcare using AI, digital therapeutics, health insurance, and genomics.

• The future of artificial intelligence in retail.

Night Trading

• Asian indices are unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 80.0 -.75 basis point.

• Asia Pacific Sovereign CDS Index 10.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.98 +.08%.

• FTSE 100 futures +.25%

• S&P 500 futures +.20%.

• NASDAQ 100 futures +.34%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (AMWD)/1.92

• (KLXI)/1.11

After the Close:

• (PAHC)/.42

Economic Releases

8:30 am EST

• The Chicago Fed National Activity Index for July is .45 versus .43 in June.

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for July is estimated to fall to 30.0 versus 32.3 in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO Business Climate Index, 2Y T-Note auction and the Steel Summit Conference could also impact trading today.

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