Morning Market Internals

NYSE Composite Index:

• Volume Running -16.9% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 47.9% of Issues Advancing, 49.1% Declining
• 144 New 52-Week Highs, 19 New Lows
• 59.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.2%
• Vix 13.4 -4.8%
• Total Put/Call .84 -4.6%
• TRIN/Arms 1.15 +18.6%

Tuesday Watch

Evening Headlines
Bloomberg:     

• U.S. Proposes Tariffs on Another $4 Billion of EU Goods.

• Trump Says New Round of Trade Talks With China Already Has Begun.

• Trump Says Mexico Tariffs Off the Table After Immigration Help.  

• Hong Kong Leader Condemns Protesters Who Stormed Government Building. 

• Stocks Mixed as Investors Mull Trade, Slowing Data. Stocks opened in mixed fashion on Tuesday as investors mulled the latest headlines on trade and implications of a disappointing set of economic data. Treasuries and the dollar were little changed. Futures on S&P 500 Index fell early on after the U.S. expanded a list of European products that may get hit with tariffs. That’s after the gauge closed at a record high on Monday in the wake of the U.S.-China trade truce. The contracts later recouped most of the drop. Japanese shares opened little changed, while South Korean ones slid. Gold held below $1,400 after tumbling Monday, and crude oil retreated further from $60 a barrel in New York amid continuing concerns about the outlook for global growth. S&P 500 futures were down 0.1% as of 9:07 a.m. in Tokyo. Earlier, the S&P 500 Index climbed 0.8% and the Nasdaq 100 Index closed up more than 1%. Japan’s Topix was little changed. S&P/ASX 200 rose 0.3%.Kospi fell 0.7%.

• Five Things You Need to Know to Start Your Day 

• Consecutive RBA Cuts, Manufacturing Slump, New Tariffs: Eco Day

• OPEC Extends Output Cuts Into 2020 as Marathon Meeting Ends.

• Bitcoin Tumbles as Cryptocurrency’s 2019 Surge Starts to Waver.

Wall Street Journal:

• Hong Kong Protests Boil Over as Activists Occupy Legislature.

• American Suburbs Swell Again as a New Generation Escapes the City.

• S&P 500 Rises to Record on Trade Truce.

• Iran Says It Breached Nuclear Pact Limits on Enriched Uranium.

• Nike(NKE) Nixes ‘Betsy Ross Flag’ Shoe After Kaepernick Intervenes.

• Trump Praises Mexico Amid Record Detention of Migrants.

• U.S. Drilling Slowdown Triggers Oil Bankruptcy.

Fox News:

• Chuck Schumer faces liberal anger over border bill after Nancy Pelosi backs off House version.

• TODD STARNES: Portland’s mayor has turned his city over to Antifa thugs.

MarketWatch.com:

• Nigam Arora: China trade truce makes a good deal less likely — here’s your stock-market game plan.

• Here are the stock market’s winners and losers in the first half of 2019.

• Old age doesn’t kill economic expansions — and the usual culprits are nowhere in sight.

• Global chip sales decline for fifth straight month.

CNBC:

• Trump says renewed trade talks with China have ‘already begun’.

• A handful of stocks rallied Monday after a US-China trade ceasefire.

• Companies are warning that earnings results are going to be brutal. 

• Health care for undocumented immigrants may ‘haunt’ Dems against Trump, says ex-Sen. Evan Bayh.

Zero Hedge:

• New Chicago Mayor Wants State Taxpayer Bailout Of Chicago Pension Debts.

• AOC Says Border Patrol "Sexually Threatened" Her, Trump Confirms ICE Raids Will Resume Soon.

• US Proposes An Additional $4 Billion In Tariffs On European Imports. 

• Hong Kong's Defiant Chief Executive Condemns Storming Protesters, Ensuring Further Confrontations.

• Female Athlete Alleges Retaliation By Coach Over Complaints About Transgender Policy.

• Biden Electability Plummets Following Debates: Poll.

• All Is Not Well In 'Deep-State' World.

• GoFundMe For Journalist Beaten By Portland Antifa Hits 300% Of Goal In One Day.

• Traders Sell The Trade-Truce News But S&P Holds Record Highs.

Business Insider: 

• The deadly poison sarin was detected in a mailbag at Facebook's offices in California.

• Apple CEO Tim Cook slams a Wall Street Journal report that he's not interested in product design, and it's part of why Jony Ive left.

• China's state-controlled media has completely ignored coverage of Hong Kong protests.

Telegraph:

• Global bond bubble inflates as fearful investors seek safe havens.

• Factories in recession as trade war, eurozone slump and 'no deal' Brexit fears hit home.

• Economy stagnates amid ‘relentless Brexit uncertainty’, survey finds.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 62.0 -.25 basis point.

• China Sovereign CDS 41.5 +.5 basis point.

• Bloomberg Emerging Markets Currency Index  67.63 -.03%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.10%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (AYI)/2.51

• (GBX)/.96

• (JEF)/.37

After the Close:

• None of note

Economic Releases
Afternoon:

• Wards Total Vehicle Sales for June are estimated to fall to 17.0M versus 17.3M in May.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking and the Eurozone PPI report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Rising into Final Hour on Diminished China Trade Deal Concerns, Oil Gain, Short-Covering, Gaming/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.6 -3.5%

• Euro/Yen Carry Return Index 127.15 -.23%

• Emerging Markets Currency Volatility(VXY) 7.99 -3.0%

• S&P 500 Implied Correlation 36.0 -1.0%

• ISE Sentiment Index 85.0 -9.6%
  

• Total Put/Call .94 +11.9%

• NYSE Arms 1.10 +48.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.39 -2.05%
  

• America Energy Sector High-Yield CDS Index 600.0 -.13%

• European Financial Sector CDS Index 62.14 -2.57%

• Italian/German 10Y Yld Spread 232.25 -8.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 62.28 -4.24%
  

• Emerging Market CDS Index 161.35 -4.47%
  

• iBoxx Offshore RMB China Corporate High Yield Index 164.26 +.06%

• 2-Year Swap Spread 5.5 +.25 basis point

• TED Spread 24.25 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -15.25 +1.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.63 unch.
• 3-Month T-Bill Yield 2.12% +2.0 basis points

• Yield Curve 24.50 -.5 basis point

• China Iron Ore Spot 120.10 USD/Metric Tonne +.77%

• Citi US Economic Surprise Index -59.20 +9.1 points

• Citi Eurozone Economic Surprise Index -6.4 -2.0 points

• Citi Emerging Markets Economic Surprise Index -35.50 -3.5 points

• 10-Year TIPS Spread 1.70 unch.
• 100.0% chance of Fed rate cut at Sept. 18th meeting, 100.0% chance of cut at October 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -84 open in Japan 
• China A50 Futures: Indicating -106 open in China

• DAX Futures: Indicating -15 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +.2%

Sector Underperformers:

• 1) Gold & Silver -3.3% 2) Utilities -1.1% 3) Papers -1.0%

Stocks Falling on Unusual Volume: 

• FNKO, EVOP, RING, NSSC, UGLD, GSHD, SSYS, CNST, MSG, THC, PCOM, COTY, PDCO, MDB, MSGN, ZM, NVCR, MPAA, PRGS, KIM, CC, ECOL, KERN, FCX and GSX

Stocks With Unusual Put Option Activity:

• 1) XLI 2) AMTD 3) IBB 4) XME 5) BBY

Stocks With Most Negative News Mentions:

• 1) GSKY 2) EXP 3) SWI 4) FCX 5) MSGN

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.9%

Sector Outperformers:

• 1) Gaming +3.2% 2) Steel +2.9% 3) Disk Drives +2.7%

Stocks Rising on Unusual Volume:

• GWR, MMYT, PUYI, BX, TCDA, MU, RTRX, BZUN, ITCI, SY, ACIA, TURN, CDLX, GTT, WYNN, SWKS, EXPI, QRVO, IPHI, KEYS, PI, GLDD, SC, BE and WDC

Stocks With Unusual Call Option Activity:

• 1) RUN 2) FLEX 3) COTY 4) LNG 5) NOV

Stocks With Most Positive News Mentions:

• 1) NPTN 2) ACIA 3) UTHR 4) MU 5) TEUM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +6.5% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 61.1% of Issues Advancing, 36.7% Declining
• 200 New 52-Week Highs, 6 New Lows
• 60.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.1%
• Vix 14.1 -6.5%
• Total Put/Call .89 +6.0%
• TRIN/Arms .77 +4.0%