Stocks Higher into Afternoon on Lower Long-Term Rates, Earnings Optimism, Technical Buying, Tech/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.5 -8.0%
• Bloomberg Global Risk On/Risk Off Index 3,354.0 +77.0 points

• Euro/Yen Carry Return Index 137.64 -.22%

• Emerging Markets Currency Volatility(VXY) 8.6 -.12%

• S&P 500 Implied Correlation 47.6 -3.8%

• ISE Sentiment Index 114.0  -18.0 points
  

• Total Put/Call .77 +18.5%

• NYSE Arms 1.09 -16.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.2 -2.1%
  

• US Energy High-Yield OAS 409.28 -.66%

• European Financial Sector CDS Index 56.0 -1.33%

• Italian/German 10Y Yld Spread 105.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 84.0 +.51%
  

• Emerging Market CDS Index 148.68 -1.41%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.2 unch.

• 2-Year Swap Spread 6.75 unch.

• TED Spread 10.75 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -.25 basis point
  
• MBS  5/10 Treasury Spread  69.0 +.25 basis point
  
• IHS Markit CMBX BBB- 6 75.25 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.96 +.34%
• 3-Month T-Bill Yield .02% unch.
  

• Yield Curve 132.0 -6.0 basis points
  

• China Iron Ore Spot 210.0 USD/Metric Tonne +2.8%

• Citi US Economic Surprise Index 25.3 +11.5 points

• Citi Eurozone Economic Surprise Index 131.0 +2.5 points
  

• Citi Emerging Markets Economic Surprise Index 64.2 +.2 point

• 10-Year TIPS Spread 2.35 +1.0 basis point
• 97.2% chance of no change at Sept. 22nd meeting, 97.2% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +71 open in Japan 
• China A50 Futures: Indicating -54 open in China

• DAX Futures: Indicating +15 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.3%

Sector Underperformers:

• 1) Homebuilding -2.8% 2) Airlines -2.2% 3) Alt Energy -1.7%

Stocks Falling on Unusual Volume: 

• GME, AMC, HYFM, DHI, Z, PLXP, BBBY, KOSS, BB, PXD, JAMF, BZH, WEN, AI, LTHM, IAA, QS, CAKE, CCS, ATOM, CLOV, ROOT, CELH, ATER, REVG, CLNE and PLBY
  

Stocks With Unusual Put Option Activity:

• 1) PLAY 2) RH 3) VRTX 4) IRM 5) URBN
  

Stocks With Most Negative News Mentions:

• 1) CLOV 2) CAN 3) RMO 4) ALHC 5) FSLY
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.7%

Sector Outperformers:

• 1) Pharma +1.8% 2) Shipping +1.8% 3) Gold & Silver +1.6%

Stocks Rising on Unusual Volume:

• RH, GATO, PRTK, AXSM, IOVA, CYH, MVIS, ACRS, RARE, APR, TEN, CCX, PATH, ASAN, OGN, SPWR, VGAC, NOW, SFM, FSLR, BIIB, STKS, GBIO, WISH and STKS
  

Stocks With Unusual Call Option Activity:

• 1) PLAY 2) RH 3) VRTX 4) IRM 5) URBN

Stocks With Most Positive News Mentions:

• 1) OXM 2) RH 3) BIIB 4) SIG 5) NOW
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -1.1% Below 100-Day Average 
• 8 Sectors Rising, 3 Sectors Declining
• 50.2% of Issues Advancing, 45.9% Declining
• 249 New 52-Week Highs, 5 New Lows
• 88.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.7%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,355.0 +77.0 points
• Vix 16.9 -5.7%
• Total Put/Call .75 +15.4%
• TRIN/Arms 1.19 -8.5%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 84.0 +.75 basis point.

• China Sovereign CDS 36.5 unch.
  

• Bloomberg Emerging Markets Currency Index 61.75 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,282.0 +4.0 points.
• Volatility Index(VIX) futures 20.37 -.62%.
• FTSE 100 futures +.13%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.12%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (JW/A)/.61
• (FIZZ)/.41
• (SIG)/1.27
  

After the Close:

• (CHWY)/-.02
• (PLAY)/-.18
  

Economic Releases

8:30 am EST

• The CPI MoM for May is estimated to rise +.4% versus a +.8% gain in April.
• The CPI Ex Food and Energy MoM for May is estimated to rise +.5% versus a +.9% gain in April.
• Real Avg. Weekly Earnings YoY for May. 
• Initial Jobless Claims for last week is estimated to fall to 370K versus 385K the prior week.
• Continuing Claims are estimated to fall to 3650K versus 3771K prior.
  

12:00 pm EST

• 1Q Household Change in Net Worth.

2:00 pm EST

• The Monthly Budget Deficit for May is estimated at -$250.0B versus -$225.6B in April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The ECB meeting, China New Loan data report, $24B 30Y T-Bond auction, weekly Langer Consumer Comfort Index, weekly EIA natural gas inventory report and the (FEYE) June briefing could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Slightly Higher into Afternoon on Lower Long-Term Rates, Earnings Optimism, Short-Covering, Biotech/Metals & Mining Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.2 +.9%
• Bloomberg Global Risk On/Risk Off Index 3,327.0 -83.0 points

• Euro/Yen Carry Return Index 137.92 +.15%

• Emerging Markets Currency Volatility(VXY) 8.6 -.4%

• S&P 500 Implied Correlation 49.2 +2.3%

• ISE Sentiment Index 141.0  +4.0 points
  

• Total Put/Call .59 -9.2%

• NYSE Arms .96 -28.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.04 -.69%
  

• US Energy High-Yield OAS 412.83 +.08%

• European Financial Sector CDS Index 56.81 -.74%

• Italian/German 10Y Yld Spread 107.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 83.54 +.51%
  

• Emerging Market CDS Index 150.59 -1.8%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.1 -.47%

• 2-Year Swap Spread 6.75 -.25 basis point

• TED Spread 10.25 -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 -.25 basis point
  
• MBS  5/10 Treasury Spread  68.75 +.75 basis point
  
• IHS Markit CMBX BBB- 6 75.0 +.5 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.70 -.03%
• 3-Month T-Bill Yield .02% unch.
  

• Yield Curve 138.0 -3.0 basis points
  

• China Iron Ore Spot 205.50 USD/Metric Tonne +1.6%

• Citi US Economic Surprise Index 13.8 +.2 point

• Citi Eurozone Economic Surprise Index 128.5 -2.0 points
  

• Citi Emerging Markets Economic Surprise Index 64.0 +.9 point

• 10-Year TIPS Spread 2.34 -4.0 basis points
• 97.0% chance of no change at Sept. 22nd meeting, 97.0% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +60 open in Japan 
• China A50 Futures: Indicating -100 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long