Stocks Slightly Lower into Final Hour on Emerging Markets Debt Angst, Oil Decline, Profit-Taking, Healthcare/Metals & Mining Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.3 -.15%

• Euro/Yen Carry Return Index 130.61 +.46%

• Emerging Markets Currency Volatility(VXY) 8.08 +.12%

• S&P 500 Implied Correlation 36.17 +1.89%

• ISE Sentiment Index 109.0 +43.42%
  

• Total Put/Call 1.06 +19.1%

• NYSE Arms 1.60 -4.19%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.07 -1.11%
  

• America Energy Sector High-Yield CDS Index 512.0 -.43%

• European Financial Sector CDS Index 70.43 -3.07%

• Italian/German 10Y Yld Spread 237.75 -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 66.58 -1.29%
  

• Emerging Market CDS Index 179.55 +2.26%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.08 -.08%

• 2-Year Swap Spread 9.0 -.75 basis point

• TED Spread 17.5 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.50 -.38%
• 3-Month T-Bill Yield 2.42% +1.0 basis point

• Yield Curve 15.0 unch.

• China Iron Ore Spot 91.20 USD/Metric Tonne -1.65%

• Citi US Economic Surprise Index -57.10 +5.2 points

• Citi Eurozone Economic Surprise Index -47.30 +.6 point

• Citi Emerging Markets Economic Surprise Index -4.50 +1.1 points

• 10-Year TIPS Spread 1.94 unch.
• 10.9% chance of Fed rate cut at June 19th meeting, 14.1% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +9 open in Japan 
• China A50 Futures: Indicating -53 open in China

• DAX Futures: Indicating +11 open in Germany

Portfolio:

• Slightly Lower: On losses in my biotech/retail sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.1%

Sector Underperformers:

• 1) Steel -1.7% 2) Healthcare Providers -1.7% 3) Biotech -1.6%

Stocks Falling on Unusual Volume: 

• APOG, ICPT, BBBY, WTW, BPT, VFF and MTSI

Stocks With Unusual Put Option Activity:

• 1) AET 2) NRG 3) EBAY 4) RAD 5) ONCE

Stocks With Most Negative News Mentions:

• 1) WTW 2) X 3) KDP 4) CATO 5) MC

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.2%

Sector Outperformers:

• 1) Homebuilders +1.3% 2) Airlines +1.2% 3) Defense +.9%

Stocks Rising on Unusual Volume:

• AUTL, PAR, AIRG, EVH, FAST, STNG, TROX, STML, TIGR, GSKY, MSM, HLNE, WWE, CNS, GDDY, PATK, FIX, CUBI, SWP, BOOM, FIVE, UNM, DOMO, DPZ and TRUP

Stocks With Unusual Call Option Activity:

• 1) JBLU 2) FAST 3) ADSK 4) COL 5) GILD

Stocks With Most Positive News Mentions:

• 1) FAST 2) FRSH 3) EVH 4) VMW 5) NOC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -19.0% Below 100-Day Average
• 9 Sectors Rising, 2 Sector Declining
• 58.7% of Issues Advancing, 38.0% Declining
• 101 New 52-Week Highs, 12 New Lows
• 56.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.5%
• Vix 13.0 -2.3%
• Total Put/Call 1.46 +64.0%
• TRIN/Arms 1.27 -24.0%

Thursday Watch

Evening Headlines

Bloomberg:      

• Brexit Will Be Delayed to Halloween After Macron Plays Hardball.    

• China's Property Market Is Feeling the Stimulus Effect.

• India's Weak Power Demand Points to More Slowdown Pain Ahead.

• Asia Stocks Trade Mixed; Bonds Steady After Gains. Asian stocks traded mixed Thursday after the Federal Reserve did little to alter investor expectations that interest rates in the U.S. are likely on hold for the remainder of this year. Treasuries steadied. Shares slipped in Japan and Australia, and were little changed in Seoul. Earlier, the S&P 500 Index posted modest gains as unexpectedly soft inflation boosted the Fed’s wait-and-see approach to rate hikes. Australian bonds climbed, tracking overnight moves higher in sovereign debt as central bankers detailed weakness in the economic outlook. The pound was steady as European Union leaders agreed to extend the date of Britain’s departure from the bloc to Oct. 31. Japan’s Topix index slipped 0.3 percent as of 9:07 a.m. in Tokyo. South Korea’s Kospi added 0.1 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent. The S&P 500 Index gained 0.4 percent. Futures rose 0.1 percent.

• Five Things You Need to Know to Start Your Day.

• Fed Signals a Year of Patience Is Ahead With a Grab Bag of Growth Risks.

Wall St. Journal:

• Uber Aims for IPO Value of $100 Billion, Below Expectations.

• Disney’s Next Big Remake: Itself.

• Ex-Obama White House Counsel Expects to Be Indicted.

• Barr Examining Origins of Probe Into Trump-Russia Ties.

• Fed Minutes: Little Need Seen to Change Interest Rates This Year.

• After Floods, Snowy ‘Bomb Cyclone’ Moves In.

CNBC:

• Amazon(AMZN) reportedly has thousands of people listening to snippets of Alexa conversation.

• Treasury Secretary Mnuchin says US and China have agreed on the trade deal enforcement mechanism.

• More than 3,500 Amazon employees push for aggressive action on "climate change".

• Stocks making the biggest moves after hours: Bed Bath & Beyond, Costco and more.

Zero Hedge:

• Busted: Thousands Of Amazon Employees Listening To Alexa Conversations.

• Hong Kong Surpasses Japan As Asia's Second-Largest Stock Market.

• EU, UK Agree To Six-Month Brexit Delay As Tory 'Spartans' Demand May Resign.

• Kim Lashes Out At US, Says NKorea Must Deliver "Serious Blow" To Sanctioning Nations; Prepares For Talks With Putin.

• 18 States Offer In-State Tuition For Illegals... And Legal Residents Are Not Happy About That.

• "Spying Did Occur": Barr Vows To Investigate FBI, DOJ Conduct During 2016 Election.

• Globalists Are Bringing Their One World Currency Plans Out Into The Open.

• Short-Squeeze Sends Small Caps Soaring But Fed-Fear Triggers Bitcoin-Buying.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 66.50 -1.25 basis points. 

• China Sovereign CDS 43.0 -.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 67.76 +.01%.

• FTSE 100 futures -.01%.

• S&P 500 futures +.10%.

• NASDAQ 100 futures +.15%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (APOG)/.91

• (CBSH)/.90

• (FAST)/.67

Economic Releases
8:30 am EST

• PPI Final Demand MoM for March is estimated to rise +.3% versus a +.1% gain in Feb. 

• PPI Ex Food and Energy MoM for March is estimated to rise +.2% versus a +.1% gain in Feb.

• Initial Jobless Claims for last week are estimated to rise to 210K versus 202K the prior week.

• Continuing Claims are estimated to rise to 1735K versus 1717K prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Clarida speaking, Fed's Bowman speaking, China CPI report, $16B 30Y T-Note auction, Bloomberg US Economic Survey for April, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (LB)/(BKE)/(CATO) monthly sales releases and the (DIS) investor day could also impact trading today.

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