Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%

Sector Outperformers:

• 1) Hospitals +3.4% 2) Semis +2.2% 3) Oil Service +2.1%

Stocks Rising on Unusual Volume:

• SEDG, ATHM, DIOD, YPF, CSII, VEC, CHEF, APTS, NVMI, BW, NUAN, MZOR, WEN, MIME, DQ, ANF, EA, TTEC, COTY, NVDA, NTRA, VRX, COHR, WWW, W, INCR, SGRY, LL, CJ, NEWR, PHH, DDD, HLI, XOG, SPNC, TDOC, AAXN, TRUE, ICHR, PII, HDP and GDOT

Stocks With Unusual Call Option Activity:

• 1) MNKD 2) NUAN 3) CZR 4) AEO 5) YELP

Stocks With Most Positive News Mentions:

• 1) NVDA 2) COHR 3) LL 4) EA 5) WWW

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +8.8% Above 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 62.9% of Issues Advancing, 32.4% Declining
• 57 New 52-Week Highs, 14 New Lows
• 48.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.2%
• Vix 9.7 -2.8%
• Total Put/Call .86 +16.2%
• TRIN/Arms .76 -20.5%

Wednesday Watch

Evening Headlines

Bloomberg:

• China Stocks Adored Abroad as Local Investors See Losses Mount. Overseas investors are sticking with China’s stocks and bonds even as the country’s crackdown on leverage wipes almost $500 billion from the domestic market. While the Shanghai Composite Index is close to an October low, the MSCI China Index -- composed almost entirely of Hong Kong and U.S. listings -- is holding on to this year’s 17 percent gain. The disconnect also applies to fixed income, with international funds owning the most sovereign debt on record and the extra cost that investors demand to hold Chinese companies’ dollar bonds over Treasuries near a decade-low. Mainland markets have struggled under the government’s campaign to trim risk in the financial sector, making stocks the least linked to the offshore index since 2006. With history showing sentiment can flip quarter to quarter, international traders are riding on a bet that solid corporate and economic data will continue to support the divergence.

• China’s Factory Prices Ease as Commodity Market Surge Abates. Producer price index rose 6.4 percent from a year earlier, versus a 6.7 percent Bloomberg survey estimate and 7.6 percent gain in March. Consumer price index climbed 1.2 percent, versus 0.9 percent gain a month earlier, the statistics bureau said Wednesday.

• Japan Stocks Rise and Kospi Swings; Yen Gain Fades. Stocks in Japan climbed on optimism healthy corporate earnings can spur further gains, while South Korean shares fluctuated after Moon Jae-in’s presidential victory. The yen and gold pared an advance. Strength in safe haven assets triggered by concerns over North Korea’s nuclear program eased during the morning in Asia. Australian banks declined after they were slapped with a new tax in the country’s budget. The greenback slipped after reaching the highest in a month Tuesday in the wake of hawkish comments from Federal Reserve officials. The yen traded at 113.93 per dollar as of 10:19 a.m. in Tokyo, little changed after jumping as much as 0.3 percent earlier. The currency fell during the past three sessions to the lowest level since mid-March. The Bloomberg Dollar Spot Index lost 0.2 percent after climbing 0.4 percent Tuesday. Japan’s Topix index increased 0.4 percent and South Korea’s Kospi added 0.2 percent. Australia’s S&P/ASX 200 gained 0.2 percent, reversing earlier declines.

• Global Commodities Sees Commodities Bottoming Out. (video)

• Apple(AAPL) Pushes Into Analyzing Your Sleep With Beddit Acquisition. Finnish company sells $150 sensor that tracks snoring, how well you slept.

Wall Street Journal:

• Trump Fires James Comey as FBI Chief. Attorney general and deputy attorney general recommend dismissing FBI director, citing handling of Clinton probe.

• Deadline Looms for GOP’s Effort to Undo Obama Rules. Loophole in obscure law could give Republicans more time to rescind regulations they oppose.

• Prepare for a New Supercycle of Innovation. A financial crisis opens the economy to new forms of growth—which are about to start pouring down.

Fox News:

• Why Comey was fired: DOJ rips handling of Clinton case in ouster. (video)

CNBC:

• It's not just stocks—there's a very weird calm affecting trading across financial markets. (video)

• NVIDIA(NVDA) stock rockets up after earnings beat. (video)

• News Corp.(NWS/A) shares rise after earnings beat.

• Disney(DIS) earnings: $1.50 a share, vs expected EPS of $1.41.

Zero Hedge: 

• President Trump Fires FBI Director James Comey.

• Are US Taxpayers Now On The Hook For Risky Wall Street Real-Estate-Backed Bonds?

• Dr.Copper Needs To Go Back To School. (graph)

• 2018 Obamacare Premium Estimates Are Surging Again Leaving Obama's "Legacy" On Life Support.

• Jeff Gundlach's Complete Ira Sohn Presentation.

• For The First Time, You Can Track Every Dollar The Government Spends.

• WTI Bounces Back Above $46 After Biggest Crude Draw Since 2016.

• China Commodity Crash Accelerates As Traders "Forced To Destock". (graph)

• Stocks Stumble But VIX Breaks Another Record. (graph)

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 89.75 -1.5 basis points. 

• Asia Pacific Sovereign CDS Index 20.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 71.74 +.08%.

• S&P 500 futures -.16%. 

• NASDAQ 100 futures -.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (MYL)/.92

• (SODA)/.43

• (BID)/-.40

• (TM)/119.46

• (VMC)/.22

• (WEN)/.08

• (WWW)/.31 

• (FOXA)/.48

• (CTRP)/.13

• (NTES)/4.03

• (RGLD)/.33

• (SYMC)/.28

• (WFM)/.37

Economic Releases  
8:30 am EST

• The Import Price Index MoM for April is estimated to rise +.1% versus a -.2% decline in March.

• The Export Price Index MoM for April is estimated to rise +.2% versus a +.2% gain in March. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,081,670 barrels versus a -930,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +28,220 barrels versus a +191,000 barrel gain the prior week. Distillate inventories are estimated to fall by -549,440 barrels versus a -562,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.08% versus a -.8% decline prior.

2:00 pm EST

• The Monthly Budget Statement for April is estimated to rise to $179.0B versus $176.2B in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Rosengren speaking,  $23B 10Y T-Note auction, WASDE crop report, weekly MBA mortgage applications report, Citi Energy/Utilities Conference, Platts Crude Oil Summit, (SNY) annual meeting, (VAR) investor day and the (NVDA) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Slightly Lower into Afternoon on Oil Decline, Technical Selling, Profit-Taking, Energy/REIT Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 9.84 +.72%

• Euro/Yen Carry Return Index 129.77 +.51%

• Emerging Markets Currency Volatility(VXY) 8.39 +1.08%

• S&P 500 Implied Correlation 40.43 +.77%

• ISE Sentiment Index 99.0 +22.22%
  

• Total Put/Call .84 unch.

• NYSE Arms .90 -7.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.34 +.3%
  

• America Energy Sector High-Yield CDS Index 382.0 +.28%

• European Financial Sector CDS Index 65.60 -1.9%

• Western Europe Sovereign Debt CDS Index 7.72 -1.34%

• Asia Pacific Sovereign Debt CDS Index 20.58 -.99%

• Emerging Market CDS Index 197.88 -.06%
  

• iBoxx Offshore RMB China Corporate High Yield Index 137.52 +.22%

• 2-Year Swap Spread 27.0 -1.5 basis points

• TED Spread 29.5 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -29.5 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.66 -.32%
• 3-Month T-Bill Yield .89% unch.
  

• Yield Curve 105.0 unch.
  

• China Import Iron Ore Spot $60.75/Metric Tonne +1.0%

• Citi US Economic Surprise Index -19.50 +.2 point

• Citi Eurozone Economic Surprise Index 69.80 +.7 point

• Citi Emerging Markets Economic Surprise Index 31.7 -.1 point

• 10-Year TIPS Spread 1.86 unch.
  
• 93.8% chance of Fed rate hike at July 26 meeting, 97.0% chance at Sept. 20 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +174 open in Japan 
• China A50 Futures: Indicating unch. open in China

• DAX Futures: Indicating -13 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.1%

Sector Underperformers:

• 1) Oil Service -1.6% 2) Gold & Silver -1.2% 3) REITs -.7%

Stocks Falling on Unusual Volume: 

• APTS, KAMN, NVRO, AHH, HTZ, NXTM, CBI, CYTK, CCP, SEE, SBRA, CIM, OTEX, SAVE, PLSE, ATKR, CLB, AFSI, FRGI, IFF, CCP and NXTM

Stocks With Unusual Put Option Activity:

• 1) P 2) W 3) EA 4) HTZ 5) COTY

Stocks With Most Negative News Mentions:

• 1) SCYX 2) KONA 3) SAVE 4) FRGI 5) VNCE

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.4%

Sector Outperformers:

• 1) Retail +1.5% 2) Gaming +1.5% 3) Biotech +1.1%

Stocks Rising on Unusual Volume:

• WRLD, W, MTSC, NVMI, VRX, QTNA, PETS, DQ, TCMD, SEAS, DPLO, KWEB, BZUN, MXL, RGR, MZOR, TDOC, FSS, WIFI, LNTH, INWK, ITGR, ORA, HDP, RACE, PTLA, LGIH, QVCA, MDC, IRWD, KRO, QTNA, AAOI, CVG, AMRI, HRTG, MAR, BKD, DF, ONCE, TSLA, BLD, WIFI and STMP

Stocks With Unusual Call Option Activity:

• 1) W 2) P 3) HPE 4) HTZ 5) EA

Stocks With Most Positive News Mentions:

• 1) W 2) RGR 3) MODN 4) AAL 5) DPLO

Charts:

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