Monday, July 29, 2019

Stocks Slightly Lower into Afternoon on China Trade Deal Worries, Brexit Concerns, Profit-Taking, Energy/Homebuilding 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) 13.0 +6.9%
  • Euro/Yen Carry Return Index 125.94 +.29%
  • Emerging Markets Currency Volatility(VXY) 6.95 +.29%
  • S&P 500 Implied Correlation 33.59 -.91%
  • ISE Sentiment Index 63.0 -33.0%
  • Total Put/Call .82 +3.8%
  • NYSE Arms 1.36 +44.7%
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.53 +2.72%
  • America Energy Sector High-Yield CDS Index 524.0 +.50%
  • European Financial Sector CDS Index 61.83 +6.59%
  • Italian/German 10Y Yld Spread 196.5 +2.25 basis points
  • Asia Ex-Japan Investment Grade CDS Index 57.86 +.62%
  • Emerging Market CDS Index 157.17 +.05%
  • iBoxx Offshore RMB China Corporate High Yield Index 165.14 +.05%
  • 2-Year Swap Spread 2.5 -.5 basis point
  • TED Spread 14.75 -2.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -25.5 -1.75 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 67.29 -.05%
  • 3-Month T-Bill Yield 2.10% -1.0 basis point
  • Yield Curve 20.75 -.25 basis point
  • China Iron Ore Spot 115.0 USD/Metric Tonne +.75%
  • Citi US Economic Surprise Index -37.4 -.2 point
  • Citi Eurozone Economic Surprise Index -40.90 -3.4 points
  • Citi Emerging Markets Economic Surprise Index -17.5 +2.9 points
  • 10-Year TIPS Spread 1.76 -2.0 basis points
  • 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 +2 open in Japan 
  • China A50 Futures: Indicating +10 open in China
  • DAX Futures: Indicating -2 open in Germany
Portfolio:
  • Slightly Lower: On losses in my tech/biotech sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:
  • Small-Cap Growth -.8%
Sector Underperformers:
  • 1) Oil Service -3.6% 2) Internet -1.6% 3) Paper -1.2%
Stocks Falling on Unusual Volume: 
  • EXAS, NSP, CTB, VET, TEAM, GTT, TTD, MDB, CYBR, AWI and TNET
Stocks With Unusual Put Option Activity:
  • 1) SIRI 2) LL 3) EXAS 4) NWL 5) MYL
Stocks With Most Negative News Mentions:
  • 1) CTB 2) GPRE 3) EQT 4) DPZ 5) BE
Charts:

Bull Radar

Style Outperformer:
  • Large-Cap Value +.1%
Sector Outperformers:
  • 1) Road & Rail +1.1% 2) REITs +.6% 3) Pharma +.5%
Stocks Rising on Unusual Volume:
  • LHC, MYL, TSEM, GHDX, CAF, YNDX, VGR, SNBR, ENVA, SLP, THC, FISV, TPB, HAIN, BUD, BAH, ARRY, IBN, LK, AZN, CMG, AUDC, GRUB, OSTK, NTUS, HAIN, ENVA and GHDX
Stocks With Unusual Call Option Activity:
  • 1) KNX 2) HLT 3) HPQ 4) NOW 5) NSC
Stocks With Most Positive News Mentions:
  • 1) FRED 2) DBD 3) NI 4) PYPL 5) FDX
Charts:

Mid-Day Market Internals

NYSE Composite Index:

Sunday, July 28, 2019

Monday Watch

Today's Headlines
Bloomberg:    
  • Stocks Look Mixed With Trade Talks, Fed in Focus. Asian stocks looked set to start the week on a mixed note as U.S.-China trade talks resume and the Federal Reserve is expected to deliver its first interest-rate cut in a decade. Futures pointed to modest gains in Japan and Australia, while Hong Kong contracts inched lower. U.S. futures were flat in early Asian trading after the S&P 500 and Nasdaq Composite indexes hit fresh records Friday as technology shares rallied. Treasuries were little changed and the dollar advanced against its major peers after White House adviser Larry Kudlow said the U.S. has ruled out plans to intervene in foreign-exchange markets. Futures on the Nikkei 225 rose 0.3% earlier. Australia’s S&P/ASX 200 Index contracts rose 0.3%. Hong Kong’s Hang Seng Index futures dipped 0.1%. S&P 500 futures were little changed.  
MarketWatch.com:
Zero Hedge:     
Night Trading
  • Asian indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 57.50 unch.
  • China Sovereign CDS 39.50 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index 67.33 unch.
  • FTSE 100 futures +.09%.
  • S&P 500 futures -.05%.
  • NASDAQ 100 futures -.04%.

Earnings of Note
Company/Estimate

Before the Open:
  • (AMG)/3.18
  • (BAH)/.72
  • (CTB)/.50
After the Close:
  • (AKS)/.06
  • (BYND)/-.08
  • (CGNX)/.23
  • (ILMN)/1.34
  • (NXPI)/1.78
  • (SBAC)/1.73
  • (TEX)/1.34
  • (RIG)/-.34
  • (TREX)/.64
  • (VNO)/.86
Economic Releases
10:30 am EST
  • The Dallas Fed Manufacturing Activity Index for July is estimated to rise to -5.0 versus -12.1 in June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China trade talks with Lightheizer and Japan industrial production report could also impact trading today.
BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the week.