Morning Market Internals

NYSE Composite Index:

• Volume Running +7.2% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 54.0% of Issues Advancing, 41.6% Declining
• 34 New 52-Week Highs, 20 New Lows
• 50.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.3%
• Vix 13.7 +5.1%
• Total Put/Call 1.0 -3.9%
• TRIN/Arms .71 -3.8%

Monday Watch

Today's Headlines

Bloomberg: 

• Human Bankers Are Losing to Robots as Nordea Sets a New Standard.

• Emerging Currency Traders Are Being Kept on Their Toes.

• Asia Stocks Open Lower Amid Earnings; Yen Steadies. Asian stocks opened on a soft note on Monday as the ongoing reporting season raised concerns about lofty expectations for earnings and traders prepare for key policy meetings from the world’s biggest central banks. The yen steadied ahead of a crucial week for the Bank of Japan. Equity benchmarks in Japan, Australia and South Korea edged lower, while futures indicated modest declines in Hong Kong. The S&P 500 Index closed weaker Friday and Treasuries climbed as second-quarter U.S. gross domestic product narrowly missed estimates, despite growing at the fastest pace since 2014. The offshore yuan added to last week’s slump, driven in part by China’s moves to ease monetary conditions. The dollar steadied and Treasury yields ticked higher. Japan’s Topix index fell 0.3 percent as of 9:12 a.m. in Tokyo. Australia’s S&P/ASX 200 Index lost 0.6 percent. South Korea’s Kospi index fell 0.2 percent. Futures on Hong Kong’s Hang Seng Index retreated 0.3 percent. Futures on the S&P 500 were down less than 0.1 percent.

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

• Storm of News to Hit Global Economy This Week Before August Calm.

Wall Street Journal: 

• Tax Cuts Bust ‘Secular Stagnation’.

• Fed Looks for Goldilocks Path as Jobless Rate Drops.

• CBS Directors Weigh Moonves Stepping Aside Pending Probe. 

• These Hedge Funds Are Doing Great but Don’t Want Your Money.

• Jack Ma’s Giant Financial Startup Is Shaking the Chinese Banking System. 

• More Potash Is Coming to an Already Crowded Fertilizer Market.

MarketWatch.com:

• Kudlow says U.S. will ‘immediately’ start new trade talks with EU.

Fox News:

• Trump tells Dems he will shutter government if he doesn't get the wall, votes on border security policies.

• WATCH: Ocasio-Cortez fans stumped on how socialism would be funded.

CNBC:

• Alphabet(GOOG) is looking even better after Facebook's disappointing earnings.

• Energy Secretary Rick Perry: ‘True energy independence is finally.

• Almost half of Americans shop online while drunk—here's how much it's costing them within our grasp’.

• BMW to raise prices of two US-made SUV models in China.

Zero Hedge:            

• Why Americans Are About To Experience Sharply Higher Prices.

• Iran's Currency Craters Most On Record Amid Panicked Scramble Into US Dollars.

• "No Experience Necessary": Employers Slash Job Requirements Amid Worker Shortage.

• The Two Things Goldman's Clients Are Most Worried About Now.

• Is China's Easing Offensive Or Defensive?

• "China's Economy Is Held Together By Capital Controls. If Those Fail, The Whole System Fails".

• American Public "Will Be Shocked" At Redacted Portions Of Carter Page FISA App: Nunes.

• Hedge Fund CIO: It Makes You Wonder If China Isn't Pushing The "Russian" Narrative.

• Martin Armstrong: Is CNN Creating A Civil War?

• Giuliani Unloads; Talks Tampered Cohen Tapes And "Witch Hunt" In Wide-Ranging Sunday Interviews.

• 40 Years Of Pummeling The Postal Service.

• Ordinary US Citizens Now Surveilled By Air Marshals As Part Of Secret New Program.

• Trump Threatens To "Shut Down" Government Over Border Security, Meets With NYT Publisher.

• Crime Rate In The U.K. Soars While 90% Of Recorded Crime Goes Uncharged.

• UK Household Debt "Worse Than At Any Time On Record".

Business Insider:

• The latest internet craze includes dancing alongside moving cars — and, surprise, people are getting badly hurt.

• Truck drivers' salaries are experiencing an 'unprecedented' jump, but it's not enough to end the driver shortage that's making everything more expensive.

Night Trading

• Asian indices are -.50% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 77.50 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 12.0 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 69.99 -.01%.

• FTSE 100 futures -.59%

• S&P 500 futures -.17%.

• NASDAQ 100 futures -.31%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (CAT)/2.74

• (DO)/-.39

• (L)/.73

• (STX)/1.45

• (SOHU)/-1.50

• (AMG)/3.59

After the Close:

• (AKS)/.21

• (AVB)/2.20

• (ILMN)/1.11

• (KLAC)/2.12

• (RIG)/-.18

• (VNO)/1.08

Economic Releases
10:00 am EST

• Pending Home Sales MoM for June is estimated to rise +.4% versus a -.5% decline in May.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for July is estimated to fall to 31.0 versus 36.5 in June.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Industrial Production report and the Eurozone Consumer Confidence report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down 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 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 

• Weekly Market Outlook by Yahoo. (video)

• Week Ahead by TheStreet.

• Stocks to Watch Next Week by Seeking Alpha.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as stable long-term rates, positive earnings outlooks and US economic optimism offset emerging markets debt angst, trade war fears and government shutdown worries. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:    

• Nafta Talks Are Now Making ‘Amazing’ Progress, Trump Aide Says.

• What's Next for U.S. GDP After Best Quarter of Growth Since 2014.

• Major Car Exporters Said to Plan Meeting Amid U.S. Tariff Threat.

• U.K. Ministers Fear Bloody Chapter in May's Brexit Thriller.

• M&A Rainmakers Flock to America's Heartland in Search for Growth.

• BRICS countries push to shift world order.

• U.S. Companies Target Wages, Efficiency Hacks as Hiring Toughens.  

• Americans Have Been Saving Much More Than Thought, New Data Show.
  

Wall Street Journal:   

• Message From Flawed GDP Report: Growth Will Be Just Fine.

• How Sellers Trick Amazon to Boost Sales.

• Facebook’s Hard Fall Shows the Pitfalls of Big Data.

• The Return of 3% Growth.

• Investors Step Back From Social-Media Highfliers.

• As Oil Industry Recovers From a Glut, a Supply Crunch Might Be Looming.

• Consumers, Business and Exports Power Strong GDP Growth.

Barron's:

• Had bullish commentary on (GOOGL), (FCAU), (TRTN), (LLY), (GM) and (FB).

• Had bearish commentary on (GLD).

MarketWatch.com:

• Half of U.S. homes are now more valuable than before the real-estate bubble burst. 

• The Top Robo Advisors: An Exclusive Ranking. 
  

• Apple earnings: Most boring quarter of the year still holds some intrigue.

Fox News:

• Trinitarios don't have MS-13's notoriety, but despite years in the shadows, they are just as vicious.

• GOP lawmaker wants answers on FBI's alleged Southern Poverty Law Center ties.

CNBC:

• Why 2 possible deals suggest the US, China need 'something big to change' to resolve their trade war.

• Soon you'll be able to get a futuristic medical check-up at Mount Sinai — we got an early peek

• Here are some of Wall Street's biggest investor cash cows, by decade.

• Other countries are getting a 'free ride' on prescription drug prices, says former pharma exec.

• Video games will dominate ESPN prime time this weekend — here's what you need to know.

Zero Hedge: 

• Mortgage Prison: Sydney Home Prices Suffer Largest Annual Decline Since 2008.

• Richard Duncan Fears Trade War Could Bring China's Economy To A "Screeching Halt".

• Trump Declares State Of Emergency As "Apocalyptic" Wildfire Devastates Northern California.

• Rep. Gaetz Files FEC Complaint Against Twitter Over Shadow Bans.

• Gold Shorts Explode; Specs Sell Vol, Bonds As "Winter In The Markets" Looms.

• Record Murders Plague Mexico In First Half Of 2018: "The Figures Are Horrible".

• Is Europe America's Friend Or Foe?

• Bannon Sets Up For EU Showdown With George Soros.

• Chicago Funnels A Third Of Property Taxes To Mayor-Managed Slush Funds.

• Watch Ocasio-Cortez Flub Her Way Through Simple Question On Democratic Socialism.

• ICE Banned From Using Philadelphia Arrest Database.

• Facebook Follows YouTube's Lead, Blocks Alex Jones' Pages.

• Expect More Instability, Corruption, And Crime From Mexico's AMLO.

• Fannie, Freddie Regulator Mel Watt Investigated For Sexual Harassment.

• Carnage Everywhere.

Business Insider:

• San Francisco is a 'nirvana' for China's main intelligence agency — and the center of an intensifying spy war.

• Democrats are 'placing party over country' by inflating Putin's threat to the US.

Weekly Scoreboard*

S&P 500 2,817.46 +.39%

The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 25,444.44 +1.40%

• NASDAQ 7,734.37 -1.24%

• Russell 2000 1,664.91 -2.03%

• S&P 500 High Beta 44.24 +.18%

• Goldman 50 Most Shorted 162.57 -3.46%

• Wilshire 5000 29,240.70 +.06%

• Russell 1000 Growth 1,492.62 -.85%

• Russell 1000 Value 1,225.42 +1.15%

• S&P 500 Consumer Staples 547.44 +.86%

• Vanda Cyclicals-Defensives 1.6383 +.03%
  

• NYSE Technology 1,907.55 -1.66%

• Transports 10,953.0 +1.85%

• Utilities 719.27 +.72%

• Bloomberg European Bank/Financial Services 90.29 +3.90%

• MSCI Emerging Markets 44.64 +1.79%

• HFRX Equity Hedge 1,292.28 +.33%

• HFRX Equity Market Neutral 1,013.22 +.16%

Sentiment/Internals

• NYSE Cumulative A/D Line 328,867 +.20%

• Bloomberg New Highs-Lows Index 147 +171

• Bloomberg Crude Oil % Bulls 74.19 +162.99%

• CFTC Oil Net Speculative Position 631,294 -3.54%

• CFTC Oil Total Open Interest 2,440,486 -2.35%

• Total Put/Call 1.04 +6.19%

• OEX Put/Call .46 -31.52%

• ISE Sentiment 101.0 -5.62%

• NYSE Arms .68 -29.13%

• Volatility(VIX) 13.72 +7.93%

• S&P 500 Implied Correlation 31.30 +1.21%

• G7 Currency Volatility (VXY) 7.28 -2.15% 

• Emerging Markets Currency Volatility (EM-VXY) 10.02 -1.18%

• Smart Money Flow Index 16,356.07 +1.51%

• ICI Money Mkt Mutual Fund Assets $2.843 Trillion -.11%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows +$1.297 Billion

• AAII % Bulls 31.5 -9.1%

• AAII % Bears 26.9 +7.9%

Futures Spot Prices

• CRB Index 194.16 +.74%

• Crude Oil 68.72 -2.53%

• Reformulated Gasoline 216.11 +4.85%

• Natural Gas 2.82 +1.56%

• Heating Oil 215.68 +2.62%

• Gold 1,222.70 -.70%

• Bloomberg Base Metals Index 189.0 +1.24%

• Copper 279.65 +1.56%

• US No. 1 Heavy Melt Scrap Steel 341.67 USD/Metric Tonne unch.

• China Iron Ore Spot 66.89 USD/Metric Tonne +2.67%

• Lumber 463.30 -4.87%

• UBS-Bloomberg Agriculture 945.46 +1.09%

Economy

• Atlanta Fed GDPNow Forecast +3.8% -70.0 basis points

• ECRI Weekly Leading Economic Index Growth Rate .8% -10.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .1977 -7.0% 

• US Economic Policy Uncertainty Index 35.76 -76.4%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 169.74 +.49%

• Citi US Economic Surprise Index -5.1 -5.0 points

• Citi Eurozone Economic Surprise Index -31.80 +5.0 points

• Citi Emerging Markets Economic Surprise Index -.7 -.6 point

• Fed Fund Futures imply 98.8% chance of no change, 1.3% chance of 25 basis point hike on 8/1

• US Dollar Index 94.70 +.21%

• MSCI Emerging Markets Currency Index 1,626.63 +.60%

• Bitcoin/USD 8,176.72 +11.24%

• Euro/Yen Carry Return Index 134.58 -.97%

• Yield Curve 28.75 -1.25 basis points
  

• 10-Year US Treasury Yield 2.96% +7.0 basis points

• Federal Reserve's Balance Sheet $4.238 Trillion -.33%

• U.S. Sovereign Debt Credit Default Swap 24.0 -.37%

• Illinois Municipal Debt Credit Default Swap 186.71 -5.83%

• Italian/German 10Y Yld Spread 234.0 +12.0 basis points

• Asia Pacific Sovereign Debt Credit Default Swap Index 11.97 -7.31%
  

• Emerging Markets Sovereign Debt CDS Index 71.71 -2.1%
  

• Israel Sovereign Debt Credit Default Swap 67.40 -4.19%

• South Korea Sovereign Debt Credit Default Swap 39.77 -8.6%

• Russia Sovereign Debt Credit Default Swap 132.70 -1.47%

• iBoxx Offshore RMB China Corporate High Yield Index 149.54 +1.34%

• 10-Year TIPS Spread 2.12% unch.

• TED Spread 35.25 -2.5 basis points

• 2-Year Swap Spread 20.0 -3.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -4.75 -2.75 basis points

• N. America Investment Grade Credit Default Swap Index 58.48 -4.85%

• America Energy Sector High-Yield Credit Default Swap Index 364.0 -3.67%

• European Financial Sector Credit Default Swap Index 73.93 -8.88%
  

• Emerging Markets Credit Default Swap Index 163.64 -5.85%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 180.0 unch.
  

• M1 Money Supply $3.670 Trillion +.06%

• Commercial Paper Outstanding 1,068.30 +.6%

• 4-Week Moving Average of Jobless Claims 218,000 -2,500

• Continuing Claims Unemployment Rate 1.2% unch.
  

• Average 30-Year Mortgage Rate 4.54% +2.0 basis points

• Weekly Mortgage Applications 362.40 -.25%

• Bloomberg Consumer Comfort 59.0 +.2 point

• Weekly Retail Sales +3.50% +20.0 basis points

• Nationwide Gas $2.86/gallon +.01/gallon

• Baltic Dry Index 1,708.0 +1.13%

• China (Export) Containerized Freight Index 820.79 -1.28%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 20.0 +14.29%

• Rail Freight Carloads 287,686 -.06%

Best Performing Style

• Large-Cap Value +1.2%

Worst Performing Style

• Small-Cap Growth -2.8%

Leading Sectors

• Steel +6.9%

• Energy +3.4%

• Airlines +2.5%

• Road & Rail +2.3%

• Drugs +2.2%

Lagging Sectors

• Computer Hardware -2.9% 

• Disk Drives -3.0%

• Gold & Silver -3.3%

• Homebuilding -4.8%

• Social Media -6.0%

Weekly High-Volume Stock Gainers (11)

• INT, HF, CIR, ZBH, B, VIAB, SKYW, CVA, DLR, FTI and AFL

Weekly High-Volume Stock Losers (42)

• BAX, PHM, TAL, SGMO, LAD, PZZA, CCS, FSLR, VTR, TACO, RTRX, CRI, EQT, GV, FLXN,UNFI, Z, QLYS, DXCM, EA, LXRX, EDIT, TPH, IRTC, NCR, PFPT, WDC, UIS, BZH, DRQ, DDD, SNBR, COLM, AXGN, ENTA, IMPV, ENVA, VIRT, TWTR, MGLN, CLUB and LOGM

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change