Bear Radar

Style Underperformer:

• Large-Cap Growth unch.

Sector Underperformers:

• 1) Video Gaming -2.2% 2) Social Media -1.6% 3) Software -.9%

Stocks Falling on Unusual Volume: 

• NERV, NVDA, CTLT, TWLO, OKTA, QDEL, APPN, PLAN, PING, CIR, PD, ONEM, AYX, AVLR, VAPO, VSAT, DXCM, PLAB, IRWD, ZYXI, MRNA, TBIO, RCUS and ARCT

Stocks With Unusual Put Option Activity:

• 1) ECL 2) EWH 3) DLTR 4) ZS 5) TWTR

Stocks With Most Negative News Mentions:

• 1) CTAS 2) GRPN 3) PINS 4) FE  5) MESA

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +3.1%

Sector Outperformers:

• 1) Banks +5.5% 2) Steel +4.6% 3) Homebuilding +3.9%

Stocks Rising on Unusual Volume:

• MRSN, JWN, CAR, CHRS, SAVE, CHDN, FWONA, BRKL, FLXN, TSCO, KTB, DKNG, NCLH, IBTX and UAL

Stocks With Unusual Call Option Activity:

• 1) SYF 2) ECL 3) AXTA 4) TSCO 5) DHI

Stocks With Most Positive News Mentions:

• 1) MRSN 2) TSCO 3) PZZA 4) CZNC 5) NIO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +61.4% Above 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 60.2% of Issues Advancing, 37.3% Declining
• 13 New 52-Week Highs, 4 New Lows
• 19.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.7%
• Vix 29.7 +6.1%
• Total Put/Call .87 +8.75%
• TRIN/Arms .91 -15.9%

Wednesday Watch

Evening Headlines

Bloomberg:         

• U.S. Weighs Sanctions on Chinese Officials, Firms Over Hong Kong.

• Trump Says Hong Kong Will Lose Finance Industry After China Law.

• What Are the New Laws China Is Pushing for Hong Kong?  

• Mega Lockdown Puts India’s Animal Spirits to Sleep in April.  

• Virus Ravages Indonesia Bank’s Clients Who Survived Asian Crisis.  

• Traders Eye CDS Payout as Fitch Downgrades Argentina to RD.

• Asia Stocks Set For Mixed Start; Dollar Slides: Markets Wrap. Asian stocks saw a mixed open Wednesday as investors weighed a report that the Trump administration is considering sanctions on Chinese officials, another sign of deteriorating Sino-American relations. The dollar and Treasuries held overnight losses. Shares in Seoul and Sydney dropped, while those in Tokyo saw smaller losses. S&P 500 futures dipped after the gauge closed at an 11-week high. The index gave up almost half its gains in the final half hour of trading with chipmakers exposed to China tumbling. The report suggested that the Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses for implementing a new national security law that would curtail the rights and freedoms of Hong Kong citizens. The yen fluctuated. Futures on the S&P 500 Index dipped 0.1% as of 9:05 a.m. in Tokyo. The gauge added 1.2% on Tuesday. Japan’s Topix index added 0.2%. South Korea’s Kospi index slid 0.1%. Australia’s S&P/ASX 200 Index fell 0.5%. 

• Oil Rally Pauses on Report Russia May Ease Supply Cuts in July.

• Hong Kong Protesting, Sanctions Considered, Good Odds: Eco Day.  

• U.S. Economy Starts to Rise From Abyss Though Pain Far From Over.  

• Hedge Funds Plan Extreme Lengths to Protect Staff After Lockdown.

Wall Street Journal:

• U.S. Moves to Audit Chinese Firms. Market Frets Over What Comes Next.

• After We Defeat the Virus.

• U.S. Can Destroy Huawei, Part Two.

• Scrapping the SAT Won’t Help Black and Latino Students.

• Boeing, Airbus Study Coronavirus on Flights.

• Facebook Executives Shut Down Efforts to Make the Site Less Divisive.

• Amtrak Prepares to Cut 20% of Workforce.

• Florida Pushes to Host Republican Convention.

Fox News:

• Trump sets his terms in feud with Dem governor over who gets to host GOP convention.

CNBC.com:

• Mount Sinai co-chair worries about coronavirus coinciding with flu and cold season.

• Congress will ‘probably’ have to pass another coronavirus stimulus bill, Mitch McConnell says.

• Coronavirus live updates: More states reopen bars, CA says hair salons and barbershops can reopen in most counties.

• Google will reimburse employees up to $1,000 to buy work-from-home gear.

• Stocks making the biggest moves after hours: Tractor Supply Company, Disney, Novavax and more.

MarketWatch.com:        

• With over 35 million people filing for unemployment since March, $1,200 stimulus checks are only a Band-Aid for Americans.  

• A staggering number of laid-off workers are receiving MORE money from unemployment benefits than when they were employed.

• Merck CEO warns of a longer wait for a COVID-19 vaccine.

Zero Hedge:    

• More Than 100,000 Americans Have Succumbed To COVID-19: Live Updates.

• YouTube Caught Censoring Comments Deemed 'Offensive' To The Communist Party.

• In Unprecedented Move, Twitter Tags Trump Tweets As 'Misinformation'.

• "This Should Trouble Us All" - Auto-Snitching COVID-Tracking Bracelets Flood Market.

• Summer Driving Season Starts Off With A Whimper... And A 30% Drop.

• India Expands Use Of HCQ To Prevent Coronavirus Based On Three Studies.

• Twitter 'Un-Verifies' Journalist One Hour After He Tweets About Obama Spying On Journalists.

• Petition Calls For Investigation Into Twitter Censorship After Hiring Of Li Fei-Fei.

• "Everything About This Is Insane" - Begging Big Tech To Be Arbiters Of Truth Will Ultimately Backfire.

• S&P Drops Below 3,000 On Report US Considering "Transaction Controls, Asset Freezes" On Chinese Officials, Firms.

• They Are Outperforming Hedge Funds, And This Is What They Are Buying.

• DOJ Closes Insider Trading Investigations Into Three Senators, Keeps Burr Probe Going.

• The High Cost Of Locking-Down America: "We've Seen A Year's Worth Of Suicide Attempts In The Last Four Weeks"..

• Vaccine Vacillation Sparks Stock Surge, Dollar Purge.

The Epoch Times:

• Medical Staff at Two Hospitals in Virus-Hit Chinese Region Infected With CCP Virus: Leaked Document.

• Trump Displeased With Beijing’s Move to Tighten Control Over Hong Kong: White House.

The Kashmir Walla: 

• 10,000 China's People Liberation Army soldiers inside Ladakh, China now claims entire Galwan valley: Report. There are close to 10,000 soldiers of China’s People’s Liberation Army (PLA) on Indian territory, Business Standard quoting sources reported. The report noted that dialogue is frozen, with the Chinese rebuffing Indian calls for flag meetings to resolve the situation. “The most worrying situation is in the Galwan valley, where the PLA has crossed China’s own claim line (which Beijing had stated was the border with India), and breached 3-4 kilometres into Indian territory. PLA troops are digging defences to equip themselves to face any Indian attack,” the newspaper report added.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 104.5 -2.75 basis points.

• China Sovereign CDS 51.25 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 60.03 -.03%.

• FTSE 100 futures -.31%.

• S&P 500 futures -.29%.

• NASDAQ 100 futures -.27%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (RL)/-.07

• (VIPS)/.75

After the Close:

• (UHAL)/-2.93

• (ADSK)/.79

• (BOX)/.02

• (COHR)/.52

• (HPQ)/.45

• (NTAP)/1.05

• (PLT)/.11

• (SMTC)/.32

• (SPT)/.29

• (TOL)/.43

• (VRNT)/.68

• (WDAY)/.49

Economic Releases
10:00 am EST

• The Richmond Fed Manufacturing Index for May is estimated to rise to -40 versus -53 in April.

2:00 pm EST

• US Fed Beige Book release.

Upcoming Splits

• None of note

Other Potential Market Movers

• The France Consumer Confidence report, weekly US retail sales reports, weekly MBA Mortgage Applications report, $45B 5Y T-Note auction, RBC Consumer/Retail Conference and the TD Securities Telecom/Media Conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and consumer shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Sharply Higher into Final Hour on Vaccine Hopes, Economy Re-Opening Optimism, Short-Covering, Transport/Financial Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 27.3 -2.9%

• Euro/Yen Carry Return Index 122.54 +.68%

• Emerging Markets Currency Volatility(VXY) 10.6 -3.7%

• S&P 500 Implied Correlation 61.5 -6.0%

• ISE Sentiment Index 89.0 -8.0 points

• Total Put/Call .76 -7.3%

• NYSE Arms .83 -41.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.29 -5.89%
  

• US Energy High-Yield OAS 1,052.0 -1.23%

• European Financial Sector CDS Index 85.65 -9.39%

• Italian/German 10Y Yld Spread 190.0 -10.5 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 104.14 -2.9%
  

• Emerging Market CDS Index 287.42 -7.59%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.65 -.02%

• 2-Year Swap Spread 9.0 -.5 basis point

• TED Spread 25.0 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -9.0 -.5 basis point
• MBS  5/10 Treasury Spread  113.0 +5.0 basis points
• IHS Markit CMBX BBB- 6 64.0 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.07 +.99%
• 3-Month T-Bill Yield .12% +1.0 basis point

• Yield Curve 49.0 +.5 basis point

• China Iron Ore Spot 91.72 USD/Metric Tonne -3.62%

• Citi US Economic Surprise Index -79.20 +2.0 points

• Citi Eurozone Economic Surprise Index -246.30 +5.3 points

• Citi Emerging Markets Economic Surprise Index 9.9 +11.0 points

• 10-Year TIPS Spread 1.14 +3.0 basis points
• 99.3% chance of no change at July 29th meeting, 99.3% chance of no change at Sept. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +79 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating -3 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/medical/consumer staple/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.9%

Sector Underperformers:

• 1) Gold & Silver -3.5% 2) Biotech -.3% 3) Software -.1%

Stocks Falling on Unusual Volume: 

• KPTI, DDOG, VRTX, PD, COUP, ATVI, ARCT, EDIT, REGN, VIVO, ADPT, MASI, TDOC, REGN, CDLX, MASI, NEM, TTWO, ADPT, TWLO, SMG, CRNC, TCBI, QDEL, ALLK, PBFX, PTON, PLAN, CNST, ALLO, ONEM, MRNA and ATRA

Stocks With Unusual Put Option Activity:

• 1) ON 2) FSCT 3) DBX 4) DLTR 5) DG

Stocks With Most Negative News Mentions:

• 1) CRNC 2) SMG 3) IPGP 4) CPTA 5) UBER

Charts:

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