Morning Market Internals

NYSE Composite Index:

• Volume Running +6.1% Above 100-Day Average
• 5 Sectors Rising, 5 Sectors Declining
• 38.4% of Issues Advancing, 58.5% Declining
• 145 New 52-Week Highs, 7 New Lows
• 59.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.5%
• Vix 14.4 +5.7%
• Total Put/Call .84 -7.7%
• TRIN/Arms 1.0 -11.4%

Friday Watch

Night Trading 

• Asian equity indices are unch. to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 141.75 -1.0 basis point. 
• Asia Pacific Sovereign CDS Index 52.75 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 70.59 +.01%. 
• S&P 500 futures -.04%. 
• NASDAQ 100 futures -.10%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• None of note

Economic Releases 
8:30 am EST

• The Trade Deficit for April is estimated to widen to -$41.0B versus -$40.4B in March.
• The Change in Non-Farm Payrolls for May is estimated at 160K versus 160K in April. 
• The Unemployment Rate for May is estimated to fall to 4.9% versus 5.0% in April.
• Average Hourly Earnings MoM for May are estimated to rise +.2% versus a +.3% gain in April.

9:45 am EST

• The Final Markit US Services PMI for May is estimated to rise to 51.4 versus a prior estimate of 51.2.
  

10:00 am EST

• The ISM Non-Manufacturing Composite for May is estimated to fall to 55.3 versus 55.7 in April.
• Factory Orders for April are estimated to rise +1.9% versus a +1.1% gain in March.
  

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Evans speaking, Fed's Brainard speaking, Eurozone Services PMI, 2016 ASCO and the (RGLD) investor day could also impact trading today.

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

Stocks Reversing Slightly Higher into Final Hour on Less Emerging Markets Debt Angst, Short-Covering, Technical Buying, Biotech/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.81 -2.75%

• Euro/Yen Carry Return Index 126.85 -.96%

• Emerging Markets Currency Volatility(VXY) 10.25 -1.44%

• S&P 500 Implied Correlation 52.42 -.83%

• ISE Sentiment Index 72.0 -31.43%

• Total Put/Call .91 -11.65%

• NYSE Arms .74 -32.73% 

Credit Investor Angst:

• North American Investment Grade CDS Index 77.51 +.23%
  

• America Energy Sector High-Yield CDS Index 894.0 +.47%

• European Financial Sector CDS Index 94.44 +1.81%

• Western Europe Sovereign Debt CDS Index 25.90 +4.71%

• Asia Pacific Sovereign Debt CDS Index 53.25 +.41%

• Emerging Market CDS Index 298.43 -.37%
  

• iBoxx Offshore RMB China Corporate High Yield Index 128.88 +.08%

• 2-Year Swap Spread 15.25 +.5 basis point
  

• TED Spread 39.5 +5.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -34.0 -3.5 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.59 +.08%
• 3-Month T-Bill Yield .27% -3.0 basis points

• Yield Curve 92.0 -3.0 basis points
  

• China Import Iron Ore Spot $48.18/Metric Tonne -.45%

• Citi US Economic Surprise Index -16.30 +.7 point

• Citi Eurozone Economic Surprise Index 2.50 -1.8 points

• Citi Emerging Markets Economic Surprise Index 7.2 +4.0 points

• 10-Year TIPS Spread 1.58% unch.
  
• 54.8% chance of Fed rate hike at July 27 meeting, 61.1% chance at September 21 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +14 open in Japan 
• China A50 Futures: Indicating -181 open in China

• DAX Futures: Indicating +33 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.5%

Sector Underperformers:

• 1) Education -3.5% 2) Coal -2.9% 3) Oil Service -2.2%

Stocks Falling on Unusual Volume:

• DEA, DERM, SIG, BOX, GWRE, AMWD, LILA, OLLI, DV, GXP, ORCL, CTLT, SRPT, AQMS, CSL, HTHT, SHOP, EROS, CMC, COST, TSRA, WRLD, TDG, LILAK, COO and KATE

Stocks With Unusual Put Option Activity:

• 1) OPK 2) ORCL 3) LOW 4) MON 5) CYH

Stocks With Most Negative News Mentions:

• 1) DV 2) BOX 3) SRPT 4) DO 5) CMC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.1%

Sector Outperformers:

• 1) HMOs +1.3% 2) Biotech +1.2% 3) Networking +.7%

Stocks Rising on Unusual Volume:

• CIEN, NERV, DCI and JOY

Stocks With Unusual Call Option Activity:

• 1) CIEN 2) SIG 3) MAR 4) AMBA 5) AET

Stocks With Most Positive News Mentions:

• 1) EVA 2) CLNE 3) ENV 4) ECOL 5) MGM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -18.1% Below 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 37.8% of Issues Advancing, 58.7% Declining
• 67 New 52-Week Highs, 6 New Lows
• 57.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.8%
• Vix 14.5 +2.3%
• Total Put/Call 1.39 +49.5%
• TRIN/Arms 1.2 +5.2%