Friday Watch

 Night Trading 

• Asian equity indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 96.75 +3.0 basis points.

• China Sovereign CDS 65.5 +2.75 basis points.
  
• China Iron Ore Spot 104.7 USD/Metric Tonne -.8%

• Bloomberg Emerging Markets Currency Index 39.2 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 56.9 +5.0%.
• Volatility Index(VIX) futures 15.3 +.04%.
• Euro Stoxx 50 futures -.02%.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.26%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by consumer and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Finish Lower on Higher Long-Term Rates, Democrat Presidential Candidate Uncertainty, Earnings Outlook Jitters, Pharma/Transport Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.09 -.34%
• 3-Month T-Bill Yield 5.34% +1.0 basis point
  

• China Iron Ore Spot 104.75 USD/Metric Tonne-.7%
• Dutch TTF Nat Gas(European benchmark) 32.7 euros/megawatt-hour +2.5%

• Citi US Economic Surprise Index -36.1 +.8 point

• Citi Eurozone Economic Surprise Index -25.7 -.3 point

• Citi Emerging Markets Economic Surprise Index 3.3 -.2 point
• S&P 500 Current Quarter EPS Growth Rate YoY(60 of 500 reporting) +7.2% -1.3 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 261.54 -.14:  Growth Rate +14.5% -.1, P/E 21.2 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.79% -4.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 332.10 -.51: Growth Rate +23.8% -.2 percentage point, P/E 34.2 -.3
  
• Bloomberg US Financial Conditions Index .82 -19.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .81 -5.0 basis points
  
• US Yield Curve -27.25 basis points (2s/10s) +1.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +2.73% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 60.5% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.39% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.26 unch.
  
• Highest target rate probability for Sept. 18th FOMC meeting: 93.5%(-2.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 54.4%(-6.8 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -21 open in Japan 
• China A50 Futures: Indicating -110 open in China

• DAX Futures: Indicating +90 open in Germany

Portfolio:

• Slightly Lower:  On losses in my industrial/biotech/consumer discretionary/financial sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long
  

Thursday Watch

Night Trading 

• Asian equity indices are -1.75% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 93.75 +1.0 basis point.

• China Sovereign CDS 62.75 +2.0 basis points.
  
• China Iron Ore Spot 105.0 USD/Metric Tonne unch.

• Bloomberg Emerging Markets Currency Index 39.2 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 56.9 +2.3%.
• Volatility Index(VIX) futures 14.6 -1.4%.
• Euro Stoxx 50 futures +.1%.

• S&P 500 futures +.21%.

• NASDAQ 100 futures +.33%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Sharply Lower into Final Hour on Escalating China Trade Tensions, Trump Taiwan Comments, Earnings Outlook Jitters, Tech/Alt Energy Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.2 -.15%
• 3-Month T-Bill Yield 5.33% unch.
  

• China Iron Ore Spot 105.0 USD/Metric Tonne unch.
• Dutch TTF Nat Gas(European benchmark) 31.9 euros/megawatt-hour -2.8%

• Citi US Economic Surprise Index -36.9 +5.8 points

• Citi Eurozone Economic Surprise Index -25.4 -.2 point

• Citi Emerging Markets Economic Surprise Index 3.5 -1.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(44 of 500 reporting) +8.5% -3.7 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 261.68 +.01:  Growth Rate +14.6% unch., P/E 21.4 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.83% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 332.61 +.13: Growth Rate +24.0% +.1 percentage point, P/E 34.5 -1.1
  
• Bloomberg US Financial Conditions Index 1.01 unch.
  
• Bloomberg Euro-Zone Financial Conditions Index .86 -6.0 basis points
  
• US Yield Curve -29.0 basis points (2s/10s) -1.5 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +2.73% +71.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 60.5% -.7 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.39% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.26 -1.0 basis point
  
• Highest target rate probability for Sept. 18th FOMC meeting: 93.5%(+.2 percentage point) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 59.9%(-.2 percentage point) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -857 open in Japan 
• China A50 Futures: Indicating -37 open in China

• DAX Futures: Indicating +132 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -2.6%
  

Sector Underperformers:

• 1) Semis -5.9% 2) Alt Energy -3.7% 3) Computer Hardware -3.5%

Stocks Falling on Unusual Volume: 

• MMYT, UPST, NUVL, OMC, AR, ICUI, CORZ, MANH, META, FHN, LPLA, ELV, NTRS, ANF, CCJ, CDNS, JBHT, TSM, APH, SCHW, UCTT, MLTX, IREN, LRCX, LQDA, GEV, CAMT, SMR, CRDO, TLN, LXEO, AMSC, ASML, VKTX, GPCR, FIVE and FDMT
  

Stocks With Unusual Put Option Activity:

• 1) XLB 2) NXE 3) FIVE 4) BSX 5) CARR
  

Stocks With Most Negative News Mentions:

• 1) FIVE 2) SAVE 3) AVGO 4) AMAT 5) TWOU
  

Sector ETFs With Most Negative Money Flow:

• 1) IGV 2) XLB 3) XOP 4) COPX 5) XHB

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.4%
  

Sector Outperformers:

• 1) Utilities +1.9% 2) Foods +1.7% 3) Insurance +1.6%

Stocks Rising on Unusual Volume:

• AEHR, VFC, GTLB, NFE, CLBT, GFS, INDV, HSIC, HE, USB, UNH, GTES, JNJ, NBR, PNFP, CFG, FULT and MXL
  

Stocks With Unusual Call Option Activity:

• 1) AUR 2) XLB 3) FIVE 4) AR 5) AEHR

Stocks With Most Positive News Mentions:

• 1) ANGO 2) ADTX 3) VFC 4) PRPO 5) UNH
  

Sector ETFs With Most Positive Money Flow:

• 1) XLI 2) XLF 3) XLV 4) KRE 5) SOXX
  

Charts:

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