Stocks Higher into Final Hour on Earnings Optimism, China Trade Deal Hopes, Oil Gain, Financial/Tech 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) 13.0 +1.8%

• Euro/Yen Carry Return Index 129.81 +.55%

• Emerging Markets Currency Volatility(VXY) 8.132 -.85%

• S&P 500 Implied Correlation 34.84 -1.3%

• ISE Sentiment Index 110.0 +10.0%
  

• Total Put/Call .85 +2.41%

• NYSE Arms 1.29 +51.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.16 -.56%
  

• America Energy Sector High-Yield CDS Index 451.0 +.94%

• European Financial Sector CDS Index 69.04 -4.33%

• Italian/German 10Y Yld Spread 258.25 -2.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 64.12 -1.55%
  

• Emerging Market CDS Index 191.22 -1.78%
  

• iBoxx Offshore RMB China Corporate High Yield Index 162.0 +.10%

• 2-Year Swap Spread 10.75 +.25 basis point

• TED Spread 17.75+.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -18.5 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.51 -.01%
• 3-Month T-Bill Yield 2.41% unch.

• Yield Curve 23.75 +2.0 basis points

• China Iron Ore Spot 92.50 USD/Metric Tonne +1.03%

• Citi US Economic Surprise Index -57.10 unch.

• Citi Eurozone Economic Surprise Index -44.40 -5.4 points

• Citi Emerging Markets Economic Surprise Index -3.3 +1.5 points

• 10-Year TIPS Spread 1.97 -1.0 basis point
• 19.7% chance of Fed rate cut at June 19th meeting, 29.7% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +197 open in Japan 
• China A50 Futures: Indicating -22 open in China

• DAX Futures: Indicating +30 open in Germany

Portfolio:

• Higher: On gains in my tech/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: 

• VNE, TIGR, CHRW, MOMO, IMMU, DO, OLED and NSP

Stocks With Unusual Put Option Activity:

• 1) EXAS 2) MNK 3) KAR 4) AET 5) ZNGA

Stocks With Most Negative News Mentions:

• 1) MOMO 2) OLED 3) INTC 4) SMLP 5) EIX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%

Sector Outperformers:

• 1) Banks +1.9% 2) I-Banks +1.5% 3) Social Media +1.2%

Stocks Rising on Unusual Volume:

• CYOU, GDI, SOHU, BE, DAVA, XENT, SNY, MDSO, BGG, NCNA, MIME, IR, PRO, ADBE, IGV, ZYME, UPWK, NSSC, PHG, CNOB, FIS, GLRE, MYOV, AZPN and TGT

Stocks With Unusual Call Option Activity:

• 1) FIS 2) LL 3) TGT 4) AMC 5) INTU

Stocks With Most Positive News Mentions:

• 1) SOHU 2) GES 3) CTB 4) L 5) ADBE

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -15.8% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 61.2% of Issues Advancing, 35.4% Declining
• 113 New 52-Week Highs, 14 New Lows
• 58.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
• Vix 12.9 +1.0%
• Total Put/Call .81 -2.4%
• TRIN/Arms 1.36 +60.0%

Monday Watch

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 64.25 +.5 basis point.
• China Sovereign CDS 41.25 +1.25 basis points.
• Bloomberg Emerging Markets Currency Index 66.53 +.03%.
• FTSE 100 futures +.19%.
• S&P 500 futures +.02%.
• NASDAQ 100 futures +.01%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMG)/3.26
• (AWI)/.94
• (DO)/-.59
• (L)/.96
• (MDR)/.10
• (SOHU)/-1.47

After the Close:

• (AKS)/.14
• (GOOG)/10.26
• (BRKS)/.10
• (CGNX)/.16
• (ETH)/.18
• (MGM)/.23
• (NXPI)/1.55
• (OII)/-.45
• (SANM)/.74
• (THC)/.29(RIG)/-.31
• (VNO)/1.32
• (WDC)/.47
• (YUMC)/.55

Economic Releases

8:30 am EST

• Personal Income for March is estimated to rise +.4% versus a +.2% gain in February.
• Personal Spending for March is estimated to rise +.7%.
• The PCE Core MoM for March is estimated to rise +.1%.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for April is estimated to rise to 10.1 versus 8.3 in March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Industrial Production report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher.  The Portfolio is 100% 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 mixed as China trade deal hopes, diminishing global growth fears and earnings optimism offset technical selling, Brexit concerns and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.