Stocks Slightly Lower into Final Hour on Global Growth Concerns, China Trade Deal Worries, Profit-Taking, Tech/Healthcare Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 16.95 +2.85%

• Euro/Yen Carry Return Index 129.40 +.25%

• Emerging Markets Currency Volatility(VXY) 8.55 +1.91%

• S&P 500 Implied Correlation 41.33 +2.66%

• ISE Sentiment Index 54.0 -8.47%
  

• Total Put/Call .88 -1.12%

• NYSE Arms 1.12 -30.86%

Credit Investor Angst:

• North American Investment Grade CDS Index 68.92 +2.35%
  

• America Energy Sector High-Yield CDS Index 522.0 +.48%

• European Financial Sector CDS Index 89.30 +1.29%

• Italian/German 10Y Yld Spread 253.0 +6.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 72.45 +.56%
  

• Emerging Market CDS Index 177.58 -.86%
  

• iBoxx Offshore RMB China Corporate High Yield Index 160.63 +.19%

• 2-Year Swap Spread 6.75 -2.0 basis points

• TED Spread 17.0 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -12.50 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.63 +.60%
• 3-Month T-Bill Yield 2.44% -1.0 basis point

• Yield Curve 16.25 +3.25 basis points

• China Iron Ore Spot 84.45 USD/Metric Tonne +.90%

• Citi US Economic Surprise Index -33.90 -.1 point

• Citi Eurozone Economic Surprise Index -53.90 +6.1 points

• Citi Emerging Markets Economic Surprise Index -19.0 +1.9 points

• 10-Year TIPS Spread 1.88 -3.0 basis points
• 30.8% chance of Fed rate cut at June 19th meeting, 37.4% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -42 open in Japan 
• China A50 Futures: Indicating +45 open in China

• DAX Futures: Indicating +12 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value unch.

Sector Underperformers:

• 1) Semis -1.3% 2) Shipping -1.1% 3) Alt Energy -.9%

Stocks Falling on Unusual Volume: 

• NUS, CRTO, GOOS, BE and GBX

Stocks With Unusual Put Option Activity:

• 1) AET 2) SIG 3) WAB 4) MDR 5) TDOC

Stocks With Most Negative News Mentions:

• 1) REPH 2) PCG 3) TRUE 4) NCR 5) AKAM

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.5%

Sector Outperformers:

• 1) Homebuilding +2.6% 2) Gold & Silver +2.3% 3) Retail +1.4%

Stocks Rising on Unusual Volume:

• AVYA, TIER, YRD, IDTI, PJT, AXSM, WGO, BIIB, VIAB, NXRT, SUZ, TUR, IYT, DSW, RC, GGAL, NVTA, CATS, VIOT, ADES, OLLI, RARE, DIS, BAND, GHL, MITK and EVRI

Stocks With Unusual Call Option Activity:

• 1) BBBY 2) HOG 3) EXPE 4) HYG 5) XHB

Stocks With Most Positive News Mentions:

• 1) VIAB 2) LULU 3) WGO 4) BIIB 5) TMO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -6.6% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 36.8% of Issues Advancing, 59.5% Declining
• 30 New 52-Week Highs, 54 New Lows
• 43.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.7%
• Vix 17.8 +7.8%
• Total Put/Call .96 +7.87%
• TRIN/Arms 1.01 -37.7%

Monday Watch

Today's Headlines

Bloomberg:

• Trade War Jaw-Jaw Returns With Fresh Talks: Global Economy Week.  

• China Has a Lot of Financial Opening Up to Do, Says Central Bank.

• Uber to Seal $3.1 Billion Deal to Buy Careem This Week. 

• Stocks to Drop in Asia, Yields Fall on Growth Woes. Stocks in Asia looked set to track heavy losses in U.S. equities as bond yields continued to march lower amid concerns that momentum is slowing in the global economy. The risk-off tone that built on Friday looks set to extend into Asia early Monday, as futures signaled losses for equities in Japan and Hong Kong, while Australian shares opened weaker. Australia’s 10-year bond yield hit an all-time low after the yield on Germany’s 10-year bonds tumbled below zero and a closely watched gauge of Treasuries inverted for the first time since 2007, underscoring the return to globally low long-term rates. U.S. equity futures showed little reaction to Special Counsel Robert Mueller’s decision to forgo an obstruction case against President Donald Trump. Futures on Japan’s Nikkei 225 declined 1.7 percent in Singapore late Friday. Hang Seng Index futures dropped 1.4 percent. Australia’s S&P/ASX 200 Index fell 1 percent. The S&P 500 Index decreased 1.9 percent Friday. Futures were little changed.

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

• Populists Run 68% of GDP, China Stimulus, Trade Jaw-Jaw: Eco Day.

Wall Street Journal:   

• Mueller Doesn’t Find Trump-Russia Conspiracy .

• iPad Mini...Air...Pro? Here’s How to Pick the Right iPad.

• Both Sides Hope for Political Fodder in Mueller Report.

• A First Step Toward Restoring Free Speech on Campus.

• With the iPhone Sputtering, Apple Bets Its Future on TV and News.

• Stock Market Rally Trips on Global Growth Fears.

• China’s Huge Bond Market Is Coming to an ETF Near You Soon.

• Islamic State’s Caliphate Is Gone, but Not Its Violent Extremism.

• Slowing Global Economy Raises Expectations Fed Will Cut Rates This Year.

Fox News:

• Probe finds no proof of Trump campaign collusion with Russia, no conclusion on obstruction: Barr letter.

• MICHAEL GOODWIN: Why Obama and Clinton should now be probed.

• White House claims victory after release of Mueller report summary.

CNBC:

• Read Attorney General William Barr’s summary of special counsel Robert Mueller’s findings.

Zero Hedge:   

• Trump "Totally Exonerated", Calls For Investigation Into "Illegal Takedown That Failed".

• Another Trade-Deal Obstacle Emerges: China Refuses To Budge On Cloud Computing.

• Impeachment Odds Implode As Mueller Report Clears Trump Of Collusion.

• Top Democrat: Mueller Report Doesn't Matter, "We Know There Was Collusion".

• Cancer-Causing Chemical Over Houston Channel Sends Hundreds To Hospital.

• The New Green Deal Is Not New. Not Green. Not A Deal.

• "We're Not In Beijing" - Italian Newspaper Slams Chinese Embassy For Trying To Intimidate Reporter.

• UK Coup Erupts: Theresa May Cabinet In Revolt, Plotting Her Imminent Overthrow.

• Record 4 Million Sign "Cancel Brexit" Petition: It Won't Change a Damn Thing.

• France Is The Socialist Future We Should Dread.

• Italy Defies West As It Officially Joins China's "Neocolonial Project".

Business Insider:

• This is China's playbook to pit EU countries against each other.

• Apple(AAPL) made 15 surprise announcements this week — here's everything it unveiled.

• Barbra Streisand apologizes after sparking outrage for saying Michael Jackson's accusers were 'thrilled' to be with him and the alleged abuse 'didn't kill them'.

Night Trading

• Asian indices are -1.25% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 72.0 -.25 basis point

• China Sovereign CDS 48.5 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 67.28 +.09%.

• FTSE 100 futures n/a.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.11%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (WGO)/.60

After the Close:

• (RHT)/1.01

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for Feb. is estimated to rise to -.25 versus -.43 in Jan.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for March is estimated to fall to 9.6 versus 13.1 in February.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO Business Climate Index and the (AAPL) news/video service event could also impact trading today.

BOTTOM LINE: Asian indices are lowe, weighed dow by technology and financial 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 week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 

• Weekly Market Outlook by Yahoo. (video)

• Stocks to Watch Next Week by Seeking Alpha.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on China trade deal worries, global growth fears, technical selling, yen strength, Brexit concerns and oil weakness. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.