Thursday Watch

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 83.75 +.5 basis point.

• China Sovereign CDS 36.75 +.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 61.04 -.09%.
• Bloomberg Global Risk-On/Risk Off Index 3,191.0 -11.0 points.
• Volatility Index(VIX) futures 20.10 +2.43%.
• FTSE 100 futures -.49%.

• S&P 500 futures -.39%.

• NASDAQ 100 futures -.61%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CMC)/.83
• (JBL)/1.04
• (KR)/.99
  

After the Close:

• (ADBE)/2.82
• (SWBI)/1.08
  

Economic Releases

8:30 am EST

• The Philly Fed Business Outlook Index for June is estimated to fall to 30.5 versus 31.5 in May.
• Initial Jobless Claims for last week are estimated to fall to 360K versus 376K the prior week. 
• Continuing Claims are estimated to fall to 3425K versus 3499K prior.
  

10:00 am EST

• The Leading Index for May is estimated to rise +1.3% versus a +1.6% gain in April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Treasury Secretary Yellen's testimony to House, Eurozone CPI report, weekly Langer Consumer Comfort Index, weekly EIA natural gas inventory report, Goldman Digital Economy Conference and the RBC Capital Tech/Fintech Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by technology and commodity shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on Fed Taper Worries, Rising Long-Term Rates, Dollar Strength, Metals&Mining/Homebuilding Sector Weakness

 

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.0 +6.0%
• Bloomberg Global Risk On/Risk Off Index 3,190.0 -168.0 points

• Euro/Yen Carry Return Index 137.10 -.6%

• Emerging Markets Currency Volatility(VXY) 8.6 -.7%

• S&P 500 Implied Correlation 36.2 +8.6%

• ISE Sentiment Index 147.0  +27.0 points
  

• Total Put/Call .90 +25.0%

• NYSE Arms 1.15 +26.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.29 +1.2%
  

• US Energy High-Yield OAS 389.53 -1.5%

• European Financial Sector CDS Index 54.72 -.82%

• Italian/German 10Y Yld Spread 103.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 83.51 +.70%
  

• Emerging Market CDS Index 154.21 +1.42%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.19 +.14%

• 2-Year Swap Spread 7.5 -.25 basis point

• TED Spread 10.5 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -.25 basis point
  
• MBS  5/10 Treasury Spread  71.5 +.75 basis point
  
• IHS Markit CMBX BBB- 6 74.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.17 -.43%
• 3-Month T-Bill Yield .04% +3.0 basis points
  

• Yield Curve 133.0 +1.0 basis point
  

• China Iron Ore Spot 206.0 USD/Metric Tonne -1.9%

• Citi US Economic Surprise Index 44.9 -5.1 points

• Citi Eurozone Economic Surprise Index 119.40 -3.2 points
  

• Citi Emerging Markets Economic Surprise Index 79.2 -7.1 points

• 10-Year TIPS Spread 2.34 -5.0 basis points
• 83.0% chance of no change at Sept. 22nd meeting, 83.2% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +114 open in Japan 
• China A50 Futures: Indicating -146 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -.8%

Sector Underperformers:

• 1) Steel -1.9% 2) Banks -1.5% 3) Energy -1.2%

Stocks Falling on Unusual Volume: 

• NESR, UPST, C, ORCL, WISH, SAGE, CRSR, WOOF, HRB, RBLX, LZB and RAPT
  

Stocks With Unusual Put Option Activity:

• 1) ORCL 2) PGR 3) SRAX 4) LEN 5) OLLI
  

Stocks With Most Negative News Mentions:

• 1) TAL 2) EDU 3) RBLX 4) LZB 5) HRB
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.1%

Sector Outperformers:

• 1) Alt Energy +1.3% 2) Shipping +.9% 3) Disk Drives +.3%

Stocks Rising on Unusual Volume:

• ALT, AVXL, RUN, FUV, MAXR, PTGX, SAVA, ZI, RMBS, ASAN, CNC, ASTS, CORT, TRHC, SUPN, MITK, WKHS, SOFI, CVGI and GLO
  

Stocks With Unusual Call Option Activity:

• 1) AMLP 2) ALT 3) HOME 4) KOPN 5) ORCL

Stocks With Most Positive News Mentions:

• 1) APRE 2) ALT 3) ARVL 4) MAXR 5) RUN
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -17.8% Below 100-Day Average 
• 5 Sectors Rising, 6 Sectors Declining
• 49.0% of Issues Advancing, 46.3% Declining
• 140 New 52-Week Highs, 16 New Lows
• 88.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.2%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,343.0 -15.0 points
• Vix 16.5 -3.1%
• Total Put/Call .90 +25.0%
• TRIN/Arms 1.14 +25.3%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 83.25 +.5 basis point.

• China Sovereign CDS 36.0 +.5 basis point.
  

• Bloomberg Emerging Markets Currency Index 61.43 unch.
• Bloomberg Global Risk-On/Risk Off Index 3,346.0 -12.0 points.
• Volatility Index(VIX) futures 19.30 -1.35%.
• FTSE 100 futures +.29%.

• S&P 500 futures +.03%.

• NASDAQ 100 futures +.06%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• (JEF)/.95
• (LEN)/2.38
  

Economic Releases

8:30 am EST

• Building Permits MoM for May is estimated to fall -.2% versus a +.3% gain in April.
• Housing Starts for May is estimated to rise to 1630K versus 1569K in April.
• The Import Price Index MoM for May is estimated to rise +.8% versus a +.7% gain in April.
• The Import Price Index Ex Petrol for  May is estimated to rise +.5% versus a +.7% gain in April.
• The Export Price Index MoM for May is estimated to rise +.8% versus a +.8% gain in April.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,686,820 barrels versus a -5,241,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -14,550 barrels versus a +7,046,000 gain the prior week. Distillate inventories are estimated to rise by +843,000 barrels versus a +4,412,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise +.24% versus a +2.6% gain prior.

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 0.00-.25%.
  

Upcoming Splits

• (TTD) 10-for-1
  

Other Potential Market Movers

• The FOMC press conference, China Industrial Production report, weekly MBA Mortgage Applications report, Deutsche Bank Auto Industry Conference, JMP Life Sciences Conference 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 industrial and energy shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.