Stocks Reversing Higher into Final Hour on US Economic Data, Earnings Optimism, Less European Debt Angst, Healthcare/Metals & Mining Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 12.77 -3.6%

• Euro/Yen Carry Return Index 129.35 +.18%

• Emerging Markets Currency Volatility(VXY) 8.19 -3.08%

• S&P 500 Implied Correlation 35.55 -.14%

• ISE Sentiment Index 114.0 +9.6%
  

• Total Put/Call .82 -3.53%

• NYSE Arms .96 -11.11%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.52 -1.68%
  

• America Energy Sector High-Yield CDS Index 446.0 +1.0%

• European Financial Sector CDS Index 70.93 -3.22%

• Italian/German 10Y Yld Spread 260.5 -9.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 64.94 -.14%
  

• Emerging Market CDS Index 194.34 -.15%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.83 +.06%

• 2-Year Swap Spread 10.5 +.25 basis point

• TED Spread 17.25+1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -17.75 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.55 +.20%
• 3-Month T-Bill Yield 2.41% -1.0 basis point

• Yield Curve 21.75 +1.0 basis point

• China Iron Ore Spot 91.35 USD/Metric Tonne +.57%

• Citi US Economic Surprise Index -57.10 +11.7 points

• Citi Eurozone Economic Surprise Index -39.0 +.1 point

• Citi Emerging Markets Economic Surprise Index -4.8 +.4 point

• 10-Year TIPS Spread 1.98 unch.
• 22.8% chance of Fed rate cut at June 19th meeting, 31.4% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +72 open in Japan 
• China A50 Futures: Indicating +72 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.2%

Sector Underperformers:

• 1) Disk Drives -2.5% 2) Semis -1.5% 3) Energy -1.4%

Stocks Falling on Unusual Volume: 

• BGG, TYPE, BITA, NBIX, INTC, INTU, FII, BEAT, TGT, IQ, NVDA, FIX, WDC and BOOM

Stocks With Unusual Put Option Activity:

• 1) AET 2) ADM 3) ONCE 4) CRC 5) F

Stocks With Most Negative News Mentions:

• 1) INTC 2) NVDA 3) TGT 4) WDC 5) QRVO

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.9%

Sector Outperformers:

• 1) Gold & Silver +2.7% 2) Education +2.1% 3) Gaming +1.8%

Stocks Rising on Unusual Volume:

• VIOT, RGEN, HTH, ISCA, F, INT, HELE, EHTH, SFLY, PRO, CASH, CY, SNE, ENVA, ALV, AVT, SAH, KIDS, MAT, ZYNE, BC, WERN, MMYT, HRC, BLMN, AN, SWAV, NOV, VRSN, ELF, MDCO, COF, BJRI, VRRM, ECHO, MAS, EHC, MAS, INT, ATRC and ANTM

Stocks With Unusual Call Option Activity:

• 1) LQD 2) CRC 3) MAT 4) F 5) CY

Stocks With Most Positive News Mentions:

• 1) EOLS 2) TREE 3) AN 4) CL 5) IPG

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -2.2% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 61.9% of Issues Advancing, 34.2% Declining
• 101 New 52-Week Highs, 37 New Lows
• 56.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.7%
• Vix 12.7 -4.3%
• Total Put/Call .85 unch.
• TRIN/Arms .80 -25.9%

Friday Watch

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.0 +1.0 basis point.

• China Sovereign CDS 42.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 66.47 +.07%.

• S&P 500 futures -.10%.

• NASDAQ 100 futures -.02%.

Morning Preview Links 

Earnings of Note 

Company/Estimate

Before the Open:

• (AAL)/.50
• (ADM)/.62
• (AZN)/.84
• (ALV)/1.60
• (AN)/.92
• (B)/.69
• (BLMN)/.73
• (COG)/.65
• (CVX)/1.33
• (CL)/.66
• (XOM)/.74
• (BEN)/.63
• (GT)/.12
• (LEA)/4.11
• (LYB)/2.18
• (SNE)/26.29 
• (TEN)/.95
• (WY)/.10
• (ZBH)/1.86

After the Close:

• None of note

Economic Releases 

8:30 am EST

• 1Q GDP is estimated to rise +2.3% versus a +2.2% gain in 4Q. 
• 1Q Personal Consumption is estimated to rise +1.0% versus a +2.5% gain in 4Q.
• The 1Q GDP Price Index is estimated to rise +1.2% versus a +1.7% gain in 4Q.
• The 1Q Core PCE is estimated to rise +1.3% versus a +1.8% gain in 4Q.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Australia PPI report and the (SCHW) Business update could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to strengthen into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Reversing Slightly Higher into Final Hour on Earnings Optimism, Diminished "Medicare-For-All" Fears, Technical Buying, Medical/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.84 -2.28%

• Euro/Yen Carry Return Index 129.10 -.7%

• Emerging Markets Currency Volatility(VXY) 8.49 +2.54%

• S&P 500 Implied Correlation 35.1 -1.46%

• ISE Sentiment Index 94.0 +42.42%
  

• Total Put/Call .85 -2.3%

• NYSE Arms 1.03 -31.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 58.30 +.85%
  

• America Energy Sector High-Yield CDS Index 443.0 -.05%

• European Financial Sector CDS Index 73.29 +3.23%

• Italian/German 10Y Yld Spread 269.75 +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.03 +1.95%
  

• Emerging Market CDS Index 194.42 -1.24%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.74 +.03%

• 2-Year Swap Spread 10.25 +1.0 basis point

• TED Spread 16.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -17.0 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.39 -.27%
• 3-Month T-Bill Yield 2.42% unch.

• Yield Curve 20.75 +.5 basis point

• China Iron Ore Spot 88.68 USD/Metric Tonne +.50%

• Citi US Economic Surprise Index -68.80 -3.0 points

• Citi Eurozone Economic Surprise Index -39.10 -.2 point

• Citi Emerging Markets Economic Surprise Index -5.2 -6.1 points

• 10-Year TIPS Spread 1.98 +2.0 basis points
• 21.8% chance of Fed rate cut at June 19th meeting, 28.2% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -62 open in Japan 
• China A50 Futures: Indicating -147 open in China

• DAX Futures: Indicating +45 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long