Stocks Higher into Afternoon on Central Bank Hopes, Oil Bounce, Short-Covering, Metals & Mining/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) 14.09 +.14%

• Euro/Yen Carry Return Index 127.09 -.25%

• Emerging Markets Currency Volatility(VXY) 9.86 unch.

• S&P 500 Implied Correlation 53.71 -.24%

• ISE Sentiment Index 100.0 +42.86%

• Total Put/Call .85 -1.16%

• NYSE Arms 1.05 +.19% 

Credit Investor Angst:

• North American Investment Grade CDS Index 73.39 -.62%
  

• America Energy Sector High-Yield CDS Index 762.0 -4.11%

• European Financial Sector CDS Index 95.18 +1.12%

• Western Europe Sovereign Debt CDS Index 25.62 -1.44%

• Asia Pacific Sovereign Debt CDS Index 51.37 +.58%

• Emerging Market CDS Index 275.57 -2.15%
  

• iBoxx Offshore RMB China Corporate High Yield Index 129.19 +.01%

• 2-Year Swap Spread 14.25 +.25 basis point
  

• TED Spread 40.25 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -29.5 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.89 +.73%
• 3-Month T-Bill Yield .24% -2.0 basis points

• Yield Curve 93.0 unch.
  

• China Import Iron Ore Spot $52.56/Metric Tonne +.04%

• Citi US Economic Surprise Index -24.40 +.8 point

• Citi Eurozone Economic Surprise Index -5.0 -2.6 points

• Citi Emerging Markets Economic Surprise Index 9.0 -1.6 points

• 10-Year TIPS Spread 1.61% +1.0 basis point
  
• 20.0% chance of Fed rate hike at July 27 meeting, 39.2% chance at September 21 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -55 open in Japan 
• China A50 Futures: Indicating -216 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.1%

Sector Underperformers:

• 1) Disk Drives -.5% 2) Agriculture -.4% 3) Computer Hardware -.3%

Stocks Falling on Unusual Volume:

• RMP, PAY, FLXN, DERM, MTSC, SUN, OXM, FFIV, CTRP, HAWK, SAFM, SPR, UNFI, IHG, SBH, EDU, PSA, GEF, Q, HEP, VRX, SYNA, ENBL, CALM, IONS and CAVM

Stocks With Unusual Put Option Activity:

• 1) AKS 2) MRO 3) RH 4) BIIB 5) APA

Stocks With Most Negative News Mentions:

• 1) PAY 2) COSI 3) RRC 4) SUN 5) TRGP

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.3%

Sector Outperformers:

• 1) Gold & Silver +4.2% 2) Steel +4.1% 3) Hospitals +1.9%

Stocks Rising on Unusual Volume:

• HMNY, AHP, PLAY, HQY, USLV, AG, X, NXTM and QUOT

Stocks With Unusual Call Option Activity:

• 1) K 2) GEL 3) ADM 4) TRGP 5) INFN

Stocks With Most Positive News Mentions:

• 1) UNH 2) DOV 3) RIG 4) BF/B 5) UA

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -5.1% Below 100-Day Average
• 5 Sectors Rising, 5 Sectors Declining
• 65.1% of Issues Advancing, 30.3% Declining
• 160 New 52-Week Highs, 4 New Lows
• 60.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.1%
• Vix 13.8 -1.7%
• Total Put/Call .56 -34.9%
• TRIN/Arms .64 -39.2%

Wednesday Watch

Night Trading 

• Asian equity indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 138.75 -.25 basis point. 
• Asia Pacific Sovereign CDS Index 51.0 -.75 basis point.
• Bloomberg Emerging Markets Currency Index 71.89 +.01%. 
• S&P 500 futures -.12%. 
• NASDAQ 100 futures -.14%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (BF/B)/.72
• (LULU)/.31
• (ABM)/.27
• (CTRP)/-.06
• (FCEL)/-.40
• (RH)/.05

Economic Releases
10:00 am EST

• The JOLTS Job Openings report for April is estimated to fall to 5675 versus 5757 in March.
  

10:30 pm EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,256,250 barrels versus a -1,366,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,131,250 barrels versus a -1,492,000 barrel decline the prior week. Distillate supplies are estimated to fall by -480,000 barrels versus a -1,255,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.47% versus a +.1% gain prior.
  

Upcoming Splits 

• (HOMB) 2-for-1

Other Potential Market Movers

• The UK Industrial Production report, China inflation data, weekly MBA mortgage applications report, BofA Merrill Energy Credit Conference, Jefferies Healthcare Conference, Baird Consumer/Tech/Services Conference, Goldman Healthcare Conference, Goldman Lodging/Gaming/Restaurant/Leisure Conference, Stephens Investment Conference, (TJX) Annual Meeting, (SCTY) annual meeting, (TAP) analyst meeting and the (AGU) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial and financial 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 Finish Slightly Higher on Central Bank Hopes, Oil Bounce, Short-Covering, Energy/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.72 +.51%

• Euro/Yen Carry Return Index 127.38 -.17%

• Emerging Markets Currency Volatility(VXY) 9.86 -1.99%

• S&P 500 Implied Correlation 53.26 +1.50%

• ISE Sentiment Index 88.0 -12.87%

• Total Put/Call .85 +14.86%

• NYSE Arms 1.03 +38.4% 

Credit Investor Angst:

• North American Investment Grade CDS Index 73.63 -.96%
  

• America Energy Sector High-Yield CDS Index 794.0 -1.97%

• European Financial Sector CDS Index 94.13 -1.30%

• Western Europe Sovereign Debt CDS Index 25.95 -.15%

• Asia Pacific Sovereign Debt CDS Index 51.05 -1.35%

• Emerging Market CDS Index 280.57 -.69%
  

• iBoxx Offshore RMB China Corporate High Yield Index 129.17 +.09%

• 2-Year Swap Spread 14.0 +.25 basis point
  

• TED Spread 41.25 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -31.5 -.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.38 +.63%
• 3-Month T-Bill Yield .26% unch.

• Yield Curve 93.0 -1.0 basis point
  

• China Import Iron Ore Spot $52.54/Metric Tonne +2.80%

• Citi US Economic Surprise Index -25.20 -.3 point

• Citi Eurozone Economic Surprise Index -2.40 unch.

• Citi Emerging Markets Economic Surprise Index 10.6 unch.

• 10-Year TIPS Spread 1.60% +2.0 basis points
  
• 19.6% chance of Fed rate hike at July 27 meeting, 40.1% chance at September 21 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +75 open in Japan 
• China A50 Futures: Indicating -182 open in China

• DAX Futures: Indicating -30 open in Germany

Portfolio: 

• Slightly Higher: On gains in my retail/tech sector longs 
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long