Wednesday, August 28, 2019

Stocks Rising into Final Hour on Diminished Global Growth Fears, Oil Gain, Short-Covering, Retail/Energy Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 19.3 -5.0%
  • Euro/Yen Carry Return Index 122.0 +.16%
  • Emerging Markets Currency Volatility(VXY) 9.03 -.66%
  • S&P 500 Implied Correlation 45.83 -2.66%
  • ISE Sentiment Index 82.0 -15.5%
  • Total Put/Call 1.22 +28.4%
  • NYSE Arms .75 -40.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.11 -2.4%
  • America Energy Sector High-Yield CDS Index 424.0 +.02%
  • European Financial Sector CDS Index 60.53 +.07%
  • Italian/German 10Y Yld Spread 175.75 -7.5 basis points
  • Asia Ex-Japan Investment Grade CDS Index 66.65 +1.05%
  • Emerging Market CDS Index 218.29 +1.23%
  • iBoxx Offshore RMB China Corporate High Yield Index 164.84 +.03%
  • 2-Year Swap Spread -.75 +1.5 basis points
  • TED Spread 14.0 -4.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -15.50 -.5 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 64.86 -.20%
  • 3-Month T-Bill Yield 1.98% +2.0 basis points
  • Yield Curve -.04 unch.
  • China Iron Ore Spot 81.50 USD/Metric Tonne +1.24%
  • Citi US Economic Surprise Index -12.6 +1.1 points
  • Citi Eurozone Economic Surprise Index -41.30 +.7 point
  • Citi Emerging Markets Economic Surprise Index -19.7 +.8 point
  • 10-Year TIPS Spread 1.56+1.0 basis point
  • 100.0% chance of Fed rate cut at Oct. 30th meeting, 100.0% chance of cut at Dec. 11th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +31 open in Japan 
  • China A50 Futures: Indicating +18 open in China
  • DAX Futures: Indicating -1 open in Germany
Portfolio:
  • Higher: On gains in my medical/biotech/retail/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:
  • Large-Cap Growth +.3%
Sector Underperformers:
  • 1) Software -.8% 2) Utilities -.3% 3) Insurance -.2%
Stocks Falling on Unusual Volume: 
  • PAHC, ADSK, MOV, PLAN, SHOP, PHR and DBD
Stocks With Unusual Put Option Activity:
  • 1) ETFC 2) ADSK 3) CPE 4) TIF 5) EZPW
Stocks With Most Negative News Mentions:
  • 1) ADSK 2) MOV 3) JNJ 4) WORK 5) CARB
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +1.5%
Sector Outperformers:
  • 1) Oil Service +4.5% 2) Retail +2.7% 3) Banks +1.7%
Stocks Rising on Unusual Volume:
  • TGE, PZZA, VET, PSTV, TSE, PM, SYNH, CONN, DY, GBT, CZZ, NOVA, MO, FSLY, NBLX, XEC and MDCO
Stocks With Unusual Call Option Activity:
  • 1) TIF 2) NLY 3) GME 4) ADSK 5) PGR
Stocks With Most Positive News Mentions:
  • 1) CHS 2) EEI 3) LCI 4) DY 5) PZZA
Charts:

Morning Market Internals

NYSE Composite Index:

Tuesday, August 27, 2019

Wednesday Watch

Evening Headlines
Bloomberg: 
  • Asia Stocks Look Mixed on Trade; Treasuries Rise. Asian stocks looked set for a mixed session Wednesday as investors assessed the latest in the unpredictable path of trade talks between the U.S. and China. Treasuries rose. Futures slipped in Tokyo, were little changed in Seoul and pointed higher in Hong Kong. U.S. futures rose. U.S. equities finished lower after a seesaw session as it appeared that China was bracing for the worst on the negotiations with U.S. President Donald Trump’s credibility becoming a key impediment to a deal. The 10-year Treasury yield fell below 1.50% to a three-year low and the dollar was steady against major currencies. Crude extended gains on expectations of shrinking U.S. inventories. Nikkei 225 futures fell 0.1% in Singapore. Australia’s S&P/ASX 200 Index futures lost 0.2%. Hang Seng Index futures rose 0.4%. S&P 500 futures rose 0.2% as of 8:20 a.m. in Tokyo.  
Zero Hedge:  
Night Trading 
  • Asian equity indices are -.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 66.25 +1.0 basis point.
  • China Sovereign CDS 48.25 unch.
  • Bloomberg Emerging Markets Currency Index  64.98 -.02%.
  • FTSE 100 futures -.13%.
  • S&P 500 futures +.18%.
  • NASDAQ 100 futures +.26%.
Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:
  • (CHS)/.00
After the Close:
  • (FIVE)/.50
  • (GES)/.29
  • (HRB)/-.75
  • (NTNX)/-.56
  • (OKTA)/-.10
  • (OLLI)/.46
  • (PVH)/1.89
  • (SMTC)/.36
  • (SCVL)/.79
  • (WSM)/.83
Economic Releases
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,941,000 barrels versus a -2,732,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -137,640 barrels versus a +312,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,156,730 barrels versus a +2,610,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.38% versus a +1.1% gain prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German GFK Confidence report, $441B 5Y T-Note auction and the weekly MBA Mortgage Applications report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on China Trade Deal Worries, Global Growth Fears, Technical Selling, Healthcare/Energy Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 20.17 +4.5%
  • Euro/Yen Carry Return Index 121.86 -.39%
  • Emerging Markets Currency Volatility(VXY) 9.25 -.54%
  • S&P 500 Implied Correlation 47.56 +6.2%
  • ISE Sentiment Index 95.0 +10.5%
  • Total Put/Call 1.0 -6.5%
  • NYSE Arms 1.17 +80.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 56.54 -.43%
  • America Energy Sector High-Yield CDS Index 423.0 -.73%
  • European Financial Sector CDS Index 60.49 -6.24%
  • Italian/German 10Y Yld Spread 183.25 -15.75 basis points
  • Asia Ex-Japan Investment Grade CDS Index 65.82 -.19%
  • Emerging Market CDS Index 214.72 +.29%
  • iBoxx Offshore RMB China Corporate High Yield Index 164.79 -.03%
  • 2-Year Swap Spread -2.25 -1.5 basis points
  • TED Spread 18.5 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -15.0 -.75 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 64.97 -.15%
  • 3-Month T-Bill Yield 1.96% -2.0 basis points
  • Yield Curve -.04 -4.0 basis points
  • China Iron Ore Spot 79.82 USD/Metric Tonne -2.34%
  • Citi US Economic Surprise Index -13.7 +2.6 points
  • Citi Eurozone Economic Surprise Index -42.0 +1.1 points
  • Citi Emerging Markets Economic Surprise Index -20.5 +1.3 points
  • 10-Year TIPS Spread 1.55 unch.
  • 100.0% chance of Fed rate cut at Oct. 30th meeting, 100.0% chance of cut at Dec. 11th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +39 open in Japan 
  • China A50 Futures: Indicating +18 open in China
  • DAX Futures: Indicating +12 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/medical sector longs and index hedges
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long