Morning Market Internals

NYSE Composite Index:

• Volume Running -3.1% Below 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 82.0% of Issues Advancing, 15.9% Declining
• 124 New 52-Week Highs, 7 New Lows
• 54.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.9%
• Vix 16.9 -12.9%
• Total Put/Call 1.09 +1.9%
• TRIN/Arms .78 -19.6%

Monday Watch

Night Trading

• Asian indices are +.5% to +1.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 144.25 -3.25 basis points.
• Asia Pacific Sovereign CDS Index 53.75 -.75 basis point.
• Bloomberg Emerging Markets Currency Index 71.92 +.20%.
• S&P 500 futures +1.03%.
• NASDAQ 100 futures +1.03%.

Morning Preview Links

Earnings of Note

Company/Estimate

• None of note

Economic Releases

• None of note

Upcoming Splits

• (SSNC) 2-for-1
• (CORE) 2-for-1

Other Potential Market Movers

• The Fed's Kashkari speaking, German PPI report and the Australia Home Price Index  could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the week.

Weekly Outlook

• Week Ahead by Bloomberg.
• Wall St. Week Ahead by Reuters.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly higher on declining European/Emerging Markets/US High-Yield debt angst, commodity strength, short-covering, yen weakness, technical buying and diminished Brexit worries. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:  

• S&P 500 Posts Worst Week Since April as Global Stress Burns Anew. Prices fell and volume surged in a week of heightened anxiety for U.S. investors, whose dreams of reaching a record high anytime soon all but faded away. A streak of six weeks without a 1 percent drop was broken as the S&P 500 Index dropped 1.2 percent to 2,071.22, the worst retreat since April. Shares slid on four of the five days, including a 30-minute plunge on Wednesday that followed testimony from Federal Reserve Chair Janet Yellen that fanned apprehension about prospects for economic growth. Pain was worse below the surface, with the S&P 500 Banks Index dropping 3 percent for its third straight decrease. The Nasdaq Biotech Index fell 4.1 percent, extending its losing streak to nine days, the longest in two decades. The gauge has lost more than 10 percent during the skid. Anxiety flared globally as concerns ranging from Japanese stimulus to Britain’s referendum on secession from the European Union pushed the Chicago Board Options Exchange Volatility Index up 14 percent after a 26 percent increase a week earlier. Volume on American exchanges averaged 7.5 billion shares, the most since March. Ten-year Treasury yields fell a third straight week by a cumulative 24 basis points, the biggest three-week plunge since February.
• China May Home Prices Rise in Fewer Cities Amid Slower Sales. China’s home prices rose in fewer cities in May than the previous month, with gains in some second-tier locations surpassing those in Shanghai and Shenzhen. New-home prices excluding affordable homes climbed in 60 cities, down from 65 in April, among the 70 tracked by the government, the National Bureau of Statistics said Saturday. They dropped in four places, compared with five a month earlier, and were unchanged in six. The recovery in home prices abated as local governments encouraged curbs in top economic centers like Shanghai and Shenzhen where prices have been surging, while they deployed home-buying stimulus in smaller cities to clear a glut of unsold residences.
• Brexit or Remain, Pound Is Set for Big Swings as EU Vote Looms. It’s almost upon us: the week when Britain takes the historic decision of whether to remain in the European Union. And whatever the polls say in the days to come -- and regardless of the result on June 24 -- the pound is set for a wild ride. One-week anticipated volatility surged Friday to the highest on record, posting the biggest increase among more than 40 global currencies tracked by Bloomberg.
• The World Economy Looks a Bit Like It's the 1930s. Now, like then, a financial crisis has left deep scars.
• Treasuries Gain a Third Week as Global Yields Deepen Record Lows. (video)

Wall Street Journal:

• Orlando Muslims, Fearing Retaliation, Are Wary. Mosques hire armed guards and attendance is down; imams attack Omar Mateen.
• Suspect Charged With Murder in Jo Cox Case Appears in Court. Thomas Mair gives his name as ‘Death to traitors, freedom for Britain’.
• Apple’s(AAPL) Challenges in China Underlined by Patent Dispute. iPhone patent case adds to increasingly tough environment for Western companies.
• Belgium Charges Three With Attempted Terrorist Murder. Officials say they may have been planning attacks on people watching Euro 16 soccer in public.
• The Syrian Catastrophe. A diplomatic revolt against Obama’s determined inaction.

Barron's:

• Had bullish commentary on (DLPH), (CELG), (MNST) and (ORCL).
• Had bearish commentary on (SQ).

MarketWatch.com:

• ‘Undertow’ could drag oil back below $40 a barrel.

Fox News:

• Obama returns to efforts to ban 'assault' weapons. (video)

Zero Hedge:

• First Brexit Poll After Jo Cox Death Reveals Stunning Result. (graph)
• Socialism's One-Percenters: "The Rich People Are Thieves... Our Socialist Dream Is Falling Apart".
• Brexit: Made In UK, Designed In Brussels.
• Head Of India Central Bank Unexpectedly Announces Intention To Leave.
• HFTs Lose: IEX Granted Exchange Status As SEC Says The Speed Race Is Over.
• Tensions Between US/NATO & Russia Are Flaring Dangerously.
• Jeff Gundlach: "Things Are Going To Get Pretty Scary". (graph)
• Japan: A Future Of Stagnation.
• Orlando Killer's Father "Knew Obama"? Schmoozed In Washington, Sought Afghan Presidency.
• Here Is Why Barclays Sees An Elevated Risk Of Recession Within 12 Months. (graph)
• Rio Declares State Of "Public Calamity", Warns Of Total Collapse In Security, Health And Transport.
• Weekend Reading: The Fed Loses Control (And What Comes Next).
• Stocks Slump Most In 4 Months As Global Financial Stress Nears 5-Year Highs. (graph)

Business Insider:

• Wall Street has been rocked by an $8 billion hedge fund's implosion.
• Lab-grown diamonds are about to be everywhere.
• Investors are sending a strong signal that they're tired of takeovers.
• 'This is a bubble. A very big bubble. And it is going to end in tears '.
• Europeans are feeling weak — and it seems to be driving nationalism.
• This chart shows the massive size and scope of America's drone fleet.
• UN: ISIS is committing a genocide.
• The man who accurately predicted 4 market crashes told us 3 more dates to worry about this year.
• Republican congressman: Donald Trump has gone 'off the track,' don't expect me to endorse.
• Oil rig count rises for 3rd straight week.

Reuters:

• Indian central bank chief to step down in surprise move. India's "rock star" central bank governor Raghuram Rajan, feted by foreign investors but under pressure from political opponents at home, stunned government officials and colleagues on Saturday by announcing he would step down after just one three-year term. Rajan, a former chief economist at the International Monetary Fund, is held in high esteem by policymakers and investors at home and abroad for overhauling the way the Reserve Bank of India (RBI) operates.

Market Week in Review

• S&P 500 2,074.17 -1.03%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,074.17 -1.03%

• DJIA 17,693.0 -.96%

• NASDAQ 4,804.14 -1.85%

• Russell 2000 1,147.49 -1.42%

• S&P 500 High Beta 29.67 -1.33%

• Goldman 50 Most Shorted 101.50 -.91% 

• Wilshire 5000 21,370.70 -1.14%

• Russell 1000 Growth 996.62 -1.23%

• Russell 1000 Value 997.55 -.77%

• S&P 500 Consumer Staples 549.59 -.60%

• Solactive US Cyclical 132.88 -1.07%

• Morgan Stanley Technology 1,073.72 -.23%

• Transports 7,600.0 -2.22%

• Utilities 685.61 +.72%

• Bloomberg European Bank/Financial Services 74.48 -1.42%

• MSCI Emerging Markets 33.14 -2.0%

• HFRX Equity Hedge 1,109.95 -1.98%

• HFRX Equity Market Neutral 995.92 -.19%

Sentiment/Internals

• NYSE Cumulative A/D Line 252,506 -1.54%

• Bloomberg New Highs-Lows Index -152 -434

• Bloomberg Crude Oil % Bulls 22.73 -29.91%

• CFTC Oil Net Speculative Position 325,182 -6.29%

• CFTC Oil Total Open Interest 1,748,314 +2.27%

• Total Put/Call 1.09 +4.59%

• OEX Put/Call 1.08 -70.45%

• ISE Sentiment 136.0 +82.93%

• NYSE Arms .75 -44.25%

• Volatility(VIX) 18.88 +14.91%

• S&P 500 Implied Correlation 56.69 +.49%

• G7 Currency Volatility (VXY) 11.50 -.09%

• Emerging Markets Currency Volatility (EM-VXY) 10.79 +2.18%

• Smart Money Flow Index 19,388.03 +.14%

• ICI Money Mkt Mutual Fund Assets $2.707 Trillion -.68%

• ICI US Equity Weekly Net New Cash Flow -$3.419 Billion

• AAII % Bulls 25.4 -8.9%

• AAII % Bears 37.5 +34.8%

Futures Spot Prices

• CRB Index 192.39 -.68%

• Crude Oil 48.12 -2.88%

• Reformulated Gasoline 150.85 -3.62%

• Natural Gas 2.63 +1.51%

• Heating Oil 148.32 -3.06%

• Gold 1,297.30 +1.36%

• Bloomberg Base Metals Index 141.84 -.06%

• Copper 205.35 +1.43%

• US No. 1 Heavy Melt Scrap Steel 229.47 USD/Ton -6.97%

• China Iron Ore Spot 51.05 USD/Ton -2.87%

• Lumber 299.0 -2.44%

• UBS-Bloomberg Agriculture 1,263.94 +.02%

Economy

• Atlanta Fed GDPNow Forecast +2.8% +30.0 basis points
• ECRI Weekly Leading Economic Index Growth Rate +7.1% +60.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.4270 +4.98%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.41 +.18%

• Citi US Economic Surprise Index -19.90 +3.1 points

• Citi Eurozone Economic Surprise Index -5.80 -3.3 points

• Citi Emerging Markets Economic Surprise Index -2.80 -8.4 points

• Fed Fund Futures imply 94.0% chance of no change, 6.0% chance of 25 basis point hike on 7/27

• US Dollar Index 94.09 -.51%
• MSCI Emerging Markets Currency Index 1,494.06 -.81%

• Euro/Yen Carry Return Index 122.87 -2.39%

• Yield Curve 92.0 +2.0 basis points

• 10-Year US Treasury Yield 1.62% -2.0 basis points

• Federal Reserve's Balance Sheet $4.433 Trillion +.21%

• U.S. Sovereign Debt Credit Default Swap 21.11 +.19%

• Illinois Municipal Debt Credit Default Swap 348.0 +.99%

• Western Europe Sovereign Debt Credit Default Swap Index 29.65 +8.53%

• Asia Pacific Sovereign Debt Credit Default Swap Index 53.96 +2.33%
  

• Emerging Markets Sovereign Debt CDS Index 134.20 +5.77%
  

• Israel Sovereign Debt Credit Default Swap 77.67 +3.55%

• Iraq Sovereign Debt Credit Default Swap 909.71 unch. 

• Russia Sovereign Debt Credit Default Swap 263.66 +5.97%

• iBoxx Offshore RMB China Corporate High Yield Index 129.52 +.11%

• 10-Year TIPS Spread 1.46% -10.0 basis points

• TED Spread 40.25 -.25 basis point

• 2-Year Swap Spread 15.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -36.75 -6.5 basis points

• N. America Investment Grade Credit Default Swap Index 83.22 +6.59%

• America Energy Sector High-Yield Credit Default Swap Index 811.0 +10.45%

• European Financial Sector Credit Default Swap Index 112.56 +12.62%
  

• Emerging Markets Credit Default Swap Index 300.88 +4.28%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 142.50 unch.
  

• M1 Money Supply $3.202 Trillion -.53%

• Commercial Paper Outstanding 1,043.50 -.8%

• 4-Week Moving Average of Jobless Claims 269,250 +250

• Continuing Claims Unemployment Rate 1.6% +10.0 basis points

• Average 30-Year Mortgage Rate 3.54% -6.0 basis points

• Weekly Mortgage Applications 507.70 -2.44%

• Bloomberg Consumer Comfort 42.1 -1.4 points

• Weekly Retail Sales +.6% unch.

• Nationwide Gas $2.35/gallon +.01/gallon

• Baltic Dry Index 598.0 -1.96%

• China (Export) Containerized Freight Index 658.64 +.30%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 -21.43%

• Rail Freight Carloads 265,432 +14.86%

Best Performing Style

• Mid-Cap Value -1.0%

Worst Performing Style

• Small-Cap Growth -1.9%

Leading Sectors

• Disk Drives +4.5%

• Social Media +4.2%

• Education +1.2%

• Gaming +1.2%

• Steel +.6%

Lagging Sectors

• Biotech -3.7% 

• Banks -3.8%

• Hospitals -4.9%

• Airlines -6.3%

• Oil Tankers -9.9%

Weekly High-Volume Stock Gainers (12)

• EXAS, LNKD, AXLL, SCWX, SYMC, AXDX, EGRX, MPAA, HRB, ISLE, QLGC and SFR

Weekly High-Volume Stock Losers (12)

• OSG, AR, LQ, COF, CRAY, GBT, CAVM, SYF, CMTL, DYN, KFY and RVNC

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change