Morning Market Internals

NYSE Composite Index:

• Volume Running -27.3% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 49.2% of Issues Advancing, 47.0% Declining
• 25 New 52-Week Highs, 1 New Low
• 21.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.7%
• Vix 31.8 +.03%
• Total Put/Call .81 -15.6%
• TRIN/Arms 1.43 +232.5%

Tuesday Watch

Evening Headlines

Bloomberg:      

• U.S. Suspends Some Trade Benefits to Hong Kong, Ross Says.    

• China Halts Meat Imports From More Plants Amid Virus Confusion.

• Japanese Factory Output Drops Again Even as Emergency Ends.

• Asia Stocks Set to Track U.S. Gains on Better Data: Markets Wrap. Asian stocks looked set to track gains in U.S. counterparts Tuesday after better-than-estimated economic data overshadowed concern over an increase in coronavirus cases. The dollar and Treasuries advanced. Futures in Japan and Australia pointed higher. Hong Kong assets will be closely watched after the Trump administration suspended some trade benefits for the city. S&P 500 futures edged higher after the benchmark erased its June decline as a report showed U.S. pending home sales posted a record gain, exceeding all forecasts. The tech-heavy Nasdaq extended gains as Facebook Inc. wiped out its losses. Oil held gains. S&P 500 futures rose 0.3% as of 7:40 a.m. in Tokyo. The S&P 500 Index rose 1.5%. Nikkei 225 futures rose 1.1%. Australia’s S&P/ASX 200 Index futures climbed 1.2%. Hong Kong’s Hang Seng Index futures rose 0.6% earlier.

• In Hot-Spot States, Virus Testing Means Long Lines, Delays.

• Worst Yet to Come, WHO Says; Record Iran Deaths: Virus Update.

• Powell Warns of Extraordinary Uncertainty, Urgency to Curb Virus.  

• Telehealth’s Long-Term Staying Power.  

• Fed Becomes No. 3 Holder of World’s Biggest Corporate-Bond ETF.

Wall Street Journal:

• Las Vegas Workers Sue Casinos Over Covid-19 Safety.

• Woke Capital Targets Free Speech.

• Capitalism After the Coronavirus.

• Speak Up, Mr. Biden.

• Supreme Court Overturns Louisiana Abortion Law.

• India Blocks Chinese Apps, Including TikTok, After Border Clash.

• Covid-19 Drug Remdesivir to Cost $3,120 for Typical Patient.

Fox News:

• Backlash against Los Angeles' plan to slash $145 million from police, cut Special Victims Bureau.

• Protesters broke gate before homeowners drew weapons: lawyer.

CNBC.com:

• JPMorgan, Bank of America, Citi and Goldman maintain dividends post-stress tests, Wells Fargo to cut.

• Biden tells donors he will end most of Trump’s tax cuts ‘and a lot of you may not like that’.

• Nearly half the U.S. population is without a job, showing how far the labor recovery has to go.

MarketWatch.com:   

• Micron earnings show spike in memory sales, forecast suggests more of the same as stock pushes higher.

• Lululemon to acquire interactive fitness company Mirror for $500 million.

Zero Hedge:        

• "This Is Not Just Accidental": How One Coronavirus Mutation Helped The Virus Conquer The Globe.

• Cops Side With Armed St. Louis Homeowners, Investigate Protesters For 'Assault By Intimidation'.

• Forbes Censors Award-Winning Environmentalist's Apology Over Three-Decade 'Climate Scare' - So Here It Is.

• Three Ideas To End The Rot On College Campuses.

• Arizona Closes Bars, Gyms & Movie Theaters For 30 Days As COVID-19 Cases, Hospitalizations Climb: Live Updates.

• "Look Out Below": Why The Economy Is About To Fly Off A Fiscal Cliff.

• YouTube Bans Richard Spencer, Stefan Molyneux & Others As "White Supremacist" Crackdown Continues.

• US Officially Revokes Hong Kong's Special Status.

• "Over-Policing Didn't Cause This, Under-Policing Did," Andy Ngo Briefs US Reps On Riots.

• Fed Chair Powell Says "Full Recovery Unlikely Until People Feel Safe".

• Bonds, Stocks, Dollar, & Gold All Bid As COVID Chaos Continues.

The Epoch Times:

• US Ramps Up Unprecedented Effort to Counter China.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are +.5% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 86.75 +.25 basis point.

• China Sovereign CDS 51.0 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 60.24 +.06%.

• FTSE 100 futures +.21%.

• S&P 500 futures +.28%.

• NASDAQ 100 futures +.44%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AYI)/1.27

• (CAG)/.51

After the Close:

• (FDX)/1.62

• (SCS)/-.14

Economic Releases 
9:00 am EST

• The S&P CoreLogic CS 20-City MoM for April is estimated to rise +.5% versus a +.47% gain in March.
  

9:45 am EST

• The MNI Chicago PMI for June is estimated to rise to 90.5 versus a reading of 86.6 in May.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for June is estimated to rise to 90.5 versus 86.6 in May.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell/Treasury's Mnuchin testifying to House, UK GDP report and the US weekly retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and commodity 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 Higher into FInal Hour on US Economic Data, Oil Gain, Short-Covering, Transport/Gaming Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 32.9 -5.3%

• Euro/Yen Carry Return Index 124.45 +.54%

• Emerging Markets Currency Volatility(VXY) 10.69 -.56%

• S&P 500 Implied Correlation 67.1 -2.75%

• ISE Sentiment Index 119.0 +27.0 points

• Total Put/Call .98 -6.67%

• NYSE Arms .69 -50.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.90 -.87%
  

• US Energy High-Yield OAS 990.50 +1.77%

• European Financial Sector CDS Index 84.80 -.4%

• Italian/German 10Y Yld Spread 177.5 +.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 87.78 -.13%
  

• Emerging Market CDS Index 204.12 -.67%
  

• iBoxx Offshore RMB China Corporate High Yield Index 169.38 +.07%

• 2-Year Swap Spread 6.75 -.25 basis point

• TED Spread 17.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -8.25 +.75 basis point
• MBS  5/10 Treasury Spread  111.0 unch.
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.14 -.01%
• 3-Month T-Bill Yield .13% -1.0 basis point

• Yield Curve 47.5 -1.75 basis points

• China Iron Ore Spot 97.75 USD/Metric Tonne -3.24%

• Citi US Economic Surprise Index 167.40 +5.3 points

• Citi Eurozone Economic Surprise Index -99.80 -18.0 points

• Citi Emerging Markets Economic Surprise Index -26.0 -7.7 points

• 10-Year TIPS Spread 1.33 +1.0 basis point
• 100.0% chance of no change at Sept. 16 meeting, 100.0% chance of no change at Nov. 5th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +345 open in Japan 
• China A50 Futures: Indicating -176 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.3%

Sector Underperformers:

• 1) Coal -3.6% 2) Biotech -.2% 3) Internet -.2%

Stocks Falling on Unusual Volume: 

• SONO, BRP, ITCI, DOCU, AMED, MDLA, VAPO, SMAR, AKRO, MDGL, CLDR, VIR, SPT, RNG, BYND, IDYA, NOVA, AXSM, FSLY, NGM, BCLI, HRTX and ICPT

Stocks With Unusual Put Option Activity:

• 1) BGCP 2) EWY 3) XLB 4) KBH 5) IYR

Stocks With Most Negative News Mentions:

• 1) BYND 2) PPC 3) ELVT 4) ELAN  5) CHK

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +3.9%

Sector Outperformers:

• 1) Airlines +5.4% 2) Alt Energy +5.1% 3) Gaming +5.0%

Stocks Rising on Unusual Volume:

• WKHS, SHLL, PCRX, RAD, KRO, DOOR, ZGNX, SBCF, MATW, BDN, BLD, SAIA and IRM

Stocks With Unusual Call Option Activity:

• 1) BLNK 2) CSX 3) ON 4) DDD 5) WKHS

Stocks With Most Positive News Mentions:

• 1) COTY 2) NVAX 3) NKLA 4) PLRX 5) MOS

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -24.3% Below 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 75.2% of Issues Advancing, 23.0% Declining
• 38 New 52-Week Highs, 1 New Low
• 19.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.6%
• Vix 33.4 -4.0%
• Total Put/Call 1.04 -1.0%
• TRIN/Arms .62 -55.3%