Bear Radar

Style Underperformer:

• Small-Cap Value -.4%

Sector Underperformers:

• 1) Coal -2.3% 2) Oil Service -1.3% 3) Banks -1.0%

Stocks Falling on Unusual Volume: 

• MYOV, PVH, MOV, INS, PANW, ANF, SMTC, CCK, ENPH, FDS, KLXE, ATHM, QSR, KHC, X, FOLD, DMRC, QADA, HLNE, TPVG, HCM, WRLD, CHKP, AMRN and VSAT

Stocks With Unusual Put Option Activity:

• 1) VNQ 2) ZS 3) STLD 4) JCI 5) BURL

Stocks With Most Negative News Mentions:

• 1) PVH 2) NIO 3) DMRC 4) SMTC 5) STLD

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.5%

Sector Outperformers:

• 1) Restaurants +1.1% 2) Robotics +1.1% 3) Computer Services +.9%

Stocks Rising on Unusual Volume:

• HYGS, IDCC, VEEV, KEYS, BURL, DG, DBI, YY, DLTR, SY, CSIQ, VIAB and TBIO

Stocks With Unusual Call Option Activity:

• 1) BURL 2) HTZ 3) JCI 4) GBT 5) TJX

Stocks With Most Positive News Mentions:

• 1) TITN 2) VEEV 3) BRP 4) KEYS 5) DG

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -14.1% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 55.1% of Issues Advancing, 41.8% Declining
• 51 New 52-Week Highs, 112 New Lows
• 43.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.2%
• Vix 17.5 -2.2%
• Total Put/Call 1.2 -14.9%
• TRIN/Arms 1.3 +27.6%

Thursday Watch

Evening Headlines
Bloomberg: 

• Here's What Could Happen If the Yuan Slips to 7 a Dollar

• Wall Street's Darkening Trade-War Gloom Means Tossing Old Advice.  

• Asia Stocks Seen Lower; Treasuries Pare Gains. Asian equities look set to remain under pressure Thursday after U.S. stocks fell to a 12-week low amid increased concern for global growth. Treasuries closed higher though pared gains as the session progressed. Futures pointed to modest losses in Japan and Australia after the S&P 500 Index closed at the lowest since March 11. The 10-year Treasury yield dipped below 2.21% before rebounding to 2.26% -- still the lowest since September 2017. The yield gap between three-month and 10-year Treasuries, often watched as an early signal of pending recession, slid to a 2007 low of minus 13 basis points. The dollar rose for a third day versus major peers, including the yen. Gold climbed and oil retreated. Futures on the Nikkei 225 fell 0.1% in Singapore. Australia’s S&P/ASX 200 Index futures fell 0.5%. Hong Kong’s Hang Seng Index futures were flat.

• U.S. Wants T-Mobile to Create New Competitor as Part of Deal.  

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

• Bond Traders Lay Out Roadmap to 2% Yield on 10-Year Treasuries.

Wall Street Journal:

• Israel Heads for New Elections in Setback for Netanyahu.

• The Dollar Underpins American Power. Rivals Are Building Workarounds.

• Tennessee Voucher Victory.

• Boeing Faces Difficult Recovery From MAX Grounding.

• Stocks, Bond Yields Fall Further Amid Trade Jitters.

• Britain’s Labour Party Leader Warms to Referendum on Brexit Deal.

Fox News:

• House speaker forced to respond to Dems' growing calls for Trump impeachment after Mueller address.

• GREGG JARRETT: The 2 faces of the special counsel have been revealed.

• Louisiana’s governor, a Democrat, poised to sign ‘heartbeat’ bill into law.

MarketWatch.com:

• Shorting Beyond Meat(BYND) stock is beyond expensive.

• Palo Alto Networks continues wave of acquisitions, but stock slips as purchases hit earnings forecast.

• Energy drinks may be linked to frightening side effects for your heart.

CNBC:

• ‘Don’t say we didn’t warn you’: A phrase from China signals the trade war could get even worse.

• Corporations were the biggest buyers of stock during the bull market, but now they’re selling.

• Stocks making the biggest moves after hours: PVH, Twilio, Palo Alto Networks and more.

• As US ETFs see $7 billion in outflows this month, experts pinpoint where to hide.

• Take a look inside McDonald’s new Times Square flagship.

Zero Hedge:

• PIMCO: "This Is The Riskiest Credit Market Ever, Central Banks' Control Over Markets Is Coming To An End".

• WeWork Is Quietly Arranging A $2.75 Billion Credit Line, Raising Questions.

• Dalio Warns Of "Risky Time As US-China Conflict Is "Much More Than A Trade War".

• Pelosi Slams Facebook As 'Willing Enablers' Of Kremlin For Refusing To Delete 'Drunk' Video.

• Pre-Crime Is Here: Law Enforcement's New TAPS System 'Predicts' If You Pose A Future Threat.

• PBOC Panics, Floods Market With Liquidity As Interbank Funding Freezes After Baoshang Seizure.

• Globalists Only Need One More Major Event To Finish Sabotaging The Economy.

• WTI Extends Gains After Bigger Than Expected Crude Draw.

• Stocks Slammed As Credit Cracks, Retail Routed, Yield Curve Craters.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 77.50 +1.5 basis points.

• China Sovereign CDS 56.75 +2.25 basis points.

• Bloomberg Emerging Markets Currency Index 65.69 +.01%.

• S&P 500 futures +.22%.

• NASDAQ 100 futures +.25%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (BURL)/1.25

• (CSIQ)/-.57

• (DG)/1.39

• (DLTR)/1.14

• (SAFM)/1.77

• (TECD)/1.97

• (TITN)/-.05

After the Close:

• (COO)/2.77

• (COST)/1.83

• (DELL)/1.20

• (GPS)/.32

• (MRVL)/.14

• (NTNX)/-.60

• (OKTA)/-.21

• (RRGB)/.49

• (UBER)/-2.20

• (ULTA)/3.07

• (VMW)/1.28

• (WSM)/.69

• (ZS)/.01

Economic Releases
8:30 am EST

• 1Q GDP is estimated to rise +3.0% versus a prior estimate of a +3.2% gain.

• 1Q Personal Consumption is estimated to rise +1.2% versus a prior estimate of a +1.2% gain.

• Initial Jobless Claims for last week are estimated to rise to 215K versus 211K the prior week.

• Continuing Claims are estimated to fall to 1667K versus 1676K prior.

• Advance Goods Trade Balance for April is estimated at -$72.7B versus -$71.4B in March.

• Retail Inventories MoM for April is estimated to rise +.2% versus a -.3% decline in March.

• Wholesale Inventories MoM for April is estimated to rise +.1% versus a -.1% decline in March.
  

10:00 am EST

• Pending Home Sales MoM for April is estimated to rise +.5% versus a +3.8% gain in March.
  

11:00 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,091,420 barrels versus a +4,740,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -774,090 barrels versus a +3,716,000 barrel gain the prior week. Distillate inventories are estimated to rise by +531,270 barrels versus a +768,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +1.14% versus a -.6% decline prior.
  

Upcoming Splits

• (FFIN) 2-for-1

Other Potential Market Movers

• The Fed's Clarida speaking, Japan Jobless Rate,  weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Keybanc Auto/Industrial/Transport Conference, Ladenburg Thalmann Tech Expo, Keefe Bruyette Real Estate Finance/Asset Mgmt Conference, DA Davidson Consumer Growth Conference and the (MOH) Investor Day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by consumer and industrial 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 Falling into Afternoon on China Trade Deal Worries, Mueller Statement, US High-Yield Debt Angst, Retail/Pharma Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 18.9 +7.9%

• Euro/Yen Carry Return Index 126.4 -.32%

• Emerging Markets Currency Volatility(VXY) 8.36 unch.

• S&P 500 Implied Correlation 44.3 +2.2%

• ISE Sentiment Index 58.0 -19.4%
  

• Total Put/Call 1.30 +21.7%

• NYSE Arms 1.65 +1.85%

Credit Investor Angst:

• North American Investment Grade CDS Index 68.42 +3.32%
  

• America Energy Sector High-Yield CDS Index 581.0 +2.33%

• European Financial Sector CDS Index 91.30 +2.2%

• Italian/German 10Y Yld Spread 282.0 -2.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 77.32 +3.67%
  

• Emerging Market CDS Index 212.45 +1.83%
  

• iBoxx Offshore RMB China Corporate High Yield Index 163.17 +.02%

• 2-Year Swap Spread 4.5 +1.25 basis points

• TED Spread 19.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -16.75 +2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.53 -.12%
• 3-Month T-Bill Yield 2.34% unch.

• Yield Curve 15.5 +1.75 basis points

• China Iron Ore Spot 101.2 USD/Metric Tonne -.88%

• Citi US Economic Surprise Index -33.1 +1.9 points

• Citi Eurozone Economic Surprise Index -20.20 -5.8 points

• Citi Emerging Markets Economic Surprise Index -24.10 +.1 point

• 10-Year TIPS Spread 1.73 -1.0 basis point
• 30.1% chance of Fed rate cut at July 31st meeting, 64.1% chance of cut at Sept. 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -223 open in Japan 
• China A50 Futures: Indicating -84 open in China

• DAX Futures: Indicating -18 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts

• Market Exposure: Moved to 50% Net Long