Friday, July 31, 2020

Stocks Reversing Lower into Afternoon on Coronavirus 2nd Wave Worries, Global Recession Fears, Technical Selling, Biotech/Transport Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Almost Every Sector Declining
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 26.2 +5.7%
  • Euro/Yen Carry Return Index 129.42 +.63%
  • Emerging Markets Currency Volatility(VXY) 10.3 +1.6%
  • S&P 500 Implied Correlation 64.9 +9.5%
  • ISE Sentiment Index 69 .0 -77.0 points
  • Total Put/Call .80 +5.3%
  • NYSE Arms 1.21 -28.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.77 +1.34%
  • US Energy High-Yield OAS 851.59 -1.3%
  • European Financial Sector CDS Index 73.25 +.18%
  • Italian/German 10Y Yld Spread 150.75 +.75 basis points
  • Asia Ex-Japan Investment Grade CDS Index  73.07 -1.35%
  • Emerging Market CDS Index 191.25 -.16%
  • iBoxx Offshore RMB China Corporate High Yield Index 176.91 +.04%
  • 2-Year Swap Spread 7.25 +.5 basis point
  • TED Spread 17.5 -.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -.75 basis point
  • MBS  5/10 Treasury Spread  87.25 -3.5 basis points
  • IHS Markit CMBX BBB- 6 67.25 +.25 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 61.13 -.38%
  • 3-Month T-Bill Yield .09% unch.
  • Yield Curve 41.0 -3.25 basis points
  • China Iron Ore Spot 105.90 USD/Metric Tonne -.04%
  • Citi US Economic Surprise Index 246.8 -.3 point
  • Citi Eurozone Economic Surprise Index 166.30 +37.5 points
  • Citi Emerging Markets Economic Surprise Index -13.1 +5.0 points
  • 10-Year TIPS Spread 1.55 +3.0 basis points
  • 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +98 open in Japan 
  • China A50 Futures: Indicating -211 open in China
  • DAX Futures: Indicating -91 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:
  • Small-Cap Value -2.5%
Sector Underperformers:
  • 1) Gaming -5.2% 2) Oil Service -3.8% 3) Airlines -3.3%
Stocks Falling on Unusual Volume: 
  • BZH, CPT, CROX, HCAC, BAND, LRN, DSPG, CAT, ONEM, POWI, GOOG, EXAS, SYK, DVA, CRS, GILD, HTH, CVX, SGEN, LTC, XLNX, SDGR, BTAI, KRA, EXPE, AIMT, MITK, FORM, NWL, FIZZ, FLS, CHEF, ZEN, UAA, BEAT, NATI, NTUS, SHAK, SKYW, WRTC, XPO, SPAQ, PRO, HRC, BLNK and KODK
Stocks With Unusual Put Option Activity:
  • 1) PTEN 2) EWH 3) F 4) EFA 5) GILD
Stocks With Most Negative News Mentions:
  • 1) RFP 2) PRO 3) CVX 4) FCAU  5) PBI
Charts:

Bull Radar

Style Outperformer:
  • Large-Cap Growth +.3%
Sector Outperformers:
  • 1) Gold & Silver +2.4% 2) Internet +.6% 3) Computer Hardware +.2%
Stocks Rising on Unusual Volume:
  • PINS, NXGN, EBS, SEM, DLX, BRKS, FB, ATUS, SC, BNFT, AAPL, TWOU, TENB, VCYT, BERY and CHD
Stocks With Unusual Call Option Activity:
  • 1) EXPE 2) COOP 3) EGHT 4) KODK 5) MARK
Stocks With Most Positive News Mentions:
  • 1) PINS 2) JCI 3) AAPL 4) PEG 5) CHTR
Charts:

Morning Market Internals

NYSE Composite Index:

Thursday, July 30, 2020

Friday Watch

Night Trading 
  • Asian equity indices are -.75%  to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 73.5 -.25 basis point.
  • China Sovereign CDS 43.75 unch.
  • Bloomberg Emerging Markets Currency Index 61.42 +.10%.
  • FTSE 100 futures +.82%.
  • S&P 500 futures +.56%.
  • NASDAQ 100 futures +1.26%.
Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:
  • (ABBV)/2.20
  • (AXL)/-2.03
  • (BAH)/.86
  • (CAT)/.72
  • (CBOE)/1.24
  • (CBRE)/.41
  • (CHTR)/2.66
  • (CVX)/-.89
  • (CHD)/.62
  • (CL)/.69
  • (XOM)/-.60
  • (FCAU)/-.87
  • (GT)/-2.03
  • (IDXX)/1.17
  • (ITW)/.71
  • (ITT)/.37
  • (JCI)/.48
  • (LYB)/.69
  • (MRK)/1.05
  • (NWL)/.18
  • (PSX)/-.84
  • (SNA)/1.83
  • (UAA)/-.40
  • (VFC)/-.68
  • (WY)/.01
After the Close:
  • (BCC)/.46
Economic Releases
8:30 am EST
  • Personal Income for June is estimated to fall -.6% versus a -4.2% decline in May.
  • Personal Spending for June is estimated to rise +5.2% versus a +8.2% gain in May.
  • The PCE Core Deflator MoM for June is estimated to rise +.2% versus a +.1% gain in May.
  • The Employment Cost Index for 2Q is estimated to rise +.6% versus a +.8% gain in 1Q.
9:45 am EST
  • The MNI Chicago PMI for July is estimated to rise to 44.5 versus 36.6 in June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Spain GDP report  could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and technology 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 Mostly Lower into Afternoon on Global Recession Fears, Earnings Outlooks, Oil Decline, Energy/Financial 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) 25.4 +5.5%
  • Euro/Yen Carry Return Index 128.61 +.28%
  • Emerging Markets Currency Volatility(VXY) 10.2 +2.4%
  • S&P 500 Implied Correlation 60.0 +3.7%
  • ISE Sentiment Index 146 .0 +36.0 points
  • Total Put/Call .76 +4.1%
  • NYSE Arms 1.31 +4.8%
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.62 +1.04%
  • US Energy High-Yield OAS 854.83 +.16%
  • European Financial Sector CDS Index 73.12 +5.3%
  • Italian/German 10Y Yld Spread 150.0 -.75 basis points
  • Asia Ex-Japan Investment Grade CDS Index  73.87 -1.03%
  • Emerging Market CDS Index 192.73 +2.1%
  • iBoxx Offshore RMB China Corporate High Yield Index 176.84 +.05%
  • 2-Year Swap Spread 6.75 -1.0 basis point
  • TED Spread 17.75 +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +1.75 basis points
  • MBS  5/10 Treasury Spread  90.75 -1.25 basis points
  • IHS Markit CMBX BBB- 6 67.0 +.25 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 61.32 -.23%
  • 3-Month T-Bill Yield .09% -1.0 basis point
  • Yield Curve 44.25 +.5 basis point
  • China Iron Ore Spot 103.49 USD/Metric Tonne -1.19%
  • Citi US Economic Surprise Index 247.1 +17.1 points
  • Citi Eurozone Economic Surprise Index 128.80 -19.5 points
  • Citi Emerging Markets Economic Surprise Index -18.1 +1.5 points
  • 10-Year TIPS Spread 1.52 -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 -134 open in Japan 
  • China A50 Futures: Indicating -122 open in China
  • DAX Futures: Indicating +37 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech sector longs and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:
  • Small-Cap Value -1.2%
Sector Underperformers:
  • 1) Energy -4.1% 2) Banks -2.7% 3) Road & Rail -2.5%
Stocks Falling on Unusual Volume: 
  • CERN, CFFA, NOW, SMG, SNDR, URI, CAR, BKR, NBL, RJF, MMP, INSG, YUM, BC, AGYS, WAFD, KHC, ITGR, MNRO, FEYE, DNKN, CXO, XOM, EPD, TUP, NGVT, MTZ, SIGI, LB, LLY, BAX, PPC, COP, PLCE, VLO, PRDO, RVMD, WNC, BHE, AOS, SIX, TENB, DAN, SRI, STBA, SBH, PI, TSE and KRA
Stocks With Unusual Put Option Activity:
  • 1) JWN 2) EWW 3) KODK 4) FITB 5) OSTK
Stocks With Most Negative News Mentions:
  • 1) QEP 2) COP 3) STBA 4) BYND  5) CHRW
Charts:

Bull Radar

Style Outperformer:
  • Mid-Cap Growth +.1%
Sector Outperformers:
  • 1) Gaming +1.4% 2) Semis +1.4% 3) Biotech +.5%
Stocks Rising on Unusual Volume:
  • OSTK, HOME, UCTT, APA, MTSI, BLKB, UPS, SANM, QCOM, AVTR, KODK, COOP, GNRC, QRVO, FCN, INOV, HOLX, FRG, PS, ELAN, ORLY and PYPL
Stocks With Unusual Call Option Activity:
  • 1) QCOM 2) KODK 3) SH 4) PRPL 5) QRVO
Stocks With Most Positive News Mentions:
  • 1) UPS 2) QCOM 3) HOLX 4) TDOC 5) APA
Charts:

Morning Market Internals

NYSE Composite Index:

Wednesday, July 29, 2020

Thursday Watch

Night Trading 
  • Asian equity indices are -.25%  to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 73.75 -1.25 basis points.
  • China Sovereign CDS 43.75 -.5 basis point.
  • Bloomberg Emerging Markets Currency Index 61.33 -.07%.
  • FTSE 100 futures +.08%.
  • S&P 500 futures -.08%.
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:
  • (AGCO)/.08
  • (ALXN)/2.58
  • (AMT)/1.94
  • (BUD)/.36
  • (APTV)/-1.36
  • (MT)/-.11
  • (AZN)/.92
  • (BAX)/.71
  • (BC)/.44
  • (CG)/.36
  • (CI)/5.16
  • (CLF)/-.51
  • (CMCSA)/.55
  • (COP)/-.58
  • (DBD)/-.19
  • (DNKN)/.49
  • (DD)/.58
  • (ELAN)/.07
  • (LLY)/1.60
  • (FLR)/.25
  • (FCN)/1.04
  • (GNRC)/.88
  • (GPC)/.92
  • (ICE)/1.04
  • (IGT)/-.61
  • (IP)/.39
  • (K)/.94
  • (KHC)/.65
  • (MA)/1.18
  • (TAP)/.64
  • (NEM)/.31
  • (NOC)/5.28
  • (ODFL)/1.07
  • (PBI)/-.01
  • (PG)/1.01
  • (RCL)/-4.55
  • (SWK)/1.28
  • (UPS)/1.08
  • (VLO)/-1.40
  • (YUM)/.54
After the Close:
  • (GOOG)/8.25
  • (AMZN)/1.62
  • (AAPL)/2.07
  • (DECK)/-1.13
  • (EA)/.79
  • (FB)/1.38
  • (F)/-1.17
  • (GILD)/1.46
  • (MGM)/-1.71
  • (SHAK)/-.38
  • (SPG)/2.23
  • (SKYW)/-.21
  • (SYK)/.57
  • (X)/-2.79
  • (XLNX)/.64
  • (ZEN)/.10
Economic Releases
8:30 am EST
  • Advance 2Q GDP is estimated to fall -34.5% versus a -5.0% decline in 1Q.
  • Advance 2Q Personal Consumption is estimated to fall -34.5% versus a -6.8% decline in 1Q.
  • Advance 2Q GDP Price Index is estimated unch. versus a +1.4% gain in 1Q.
  • Advance 2Q Core PCE QoQ is estimated to fall -.9% versus a +1.7% gain in 1Q.
  • Initial Jobless Claims for last week are estimated to rise to 1430K versus 1416K the prior week.
  • Continuing Claims are estimated to rise to 16250K versus 16197K prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German GDP report, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology 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 Rising into Final Hour on Global Stimulus Hopes, Earnings Outlooks, Short-Covering, Retail/Healthcare Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 24.2 -4.7%
  • Euro/Yen Carry Return Index 128.14 +.42%
  • Emerging Markets Currency Volatility(VXY) 10.02 +.2%
  • S&P 500 Implied Correlation 58.6 -5.0%
  • ISE Sentiment Index 110 .0 -15.0 points
  • Total Put/Call .70 -14.6%
  • NYSE Arms 1.22 +28.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.22 -1.87%
  • US Energy High-Yield OAS 855.93 -.71%
  • European Financial Sector CDS Index 69.43 -1.2%
  • Italian/German 10Y Yld Spread 150.75 +4.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index  74.53 -.09%
  • Emerging Market CDS Index 189.28 -.85%
  • iBoxx Offshore RMB China Corporate High Yield Index 176.75 +.01%
  • 2-Year Swap Spread 7.75 +.25 basis point
  • TED Spread 17.0 +2.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.5 basis point
  • MBS  5/10 Treasury Spread  92.0 -4.25 basis points
  • IHS Markit CMBX BBB- 6 66.75 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 61.40 +.09%
  • 3-Month T-Bill Yield .10% unch.
  • Yield Curve 43.75 -4.0 basis points
  • China Iron Ore Spot 107.12 USD/Metric Tonne +1.52%
  • Citi US Economic Surprise Index 230.0 -6.2 points
  • Citi Eurozone Economic Surprise Index 148.30 +.7 point
  • Citi Emerging Markets Economic Surprise Index -19.6 -.7 point
  • 10-Year TIPS Spread 1.53 +2.0 basis points
  • 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 +108 open in Japan 
  • China A50 Futures: Indicating -18 open in China
  • DAX Futures: Indicating +9 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/medical/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long