Tuesday, December 31, 2019

Stocks Reversing Slightly Higher into Final Hour on Global Growth Optimism, Short-Covering, Technical Buying, Tech/Energy Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Light
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 14.2 -4.5%
  • Euro/Yen Carry Return Index 126.50 -.05%
  • Emerging Markets Currency Volatility(VXY) 6.58 +.15%
  • S&P 500 Implied Correlation 43.0 -6.2%
  • ISE Sentiment Index 92.0 +10
  • Total Put/Call 1.02 +14.6%
  • NYSE Arms .84 -10.6%
Credit Investor Angst:
  • North American Investment Grade CDS Index 45.22 +.89%
  • America Energy Sector High-Yield CDS Index 546.0 +.24%
  • European Financial Sector CDS Index 51.64 +.08%
  • Italian/German 10Y Yld Spread 159.75 unch.
  • Asia Ex-Japan Investment Grade CDS Index 53.45 +.50%
  • Emerging Market CDS Index 173.74 +.01%
  • iBoxx Offshore RMB China Corporate High Yield Index 167.44 +.02%
  • 2-Year Swap Spread 12.75 +1.5 basis points
  • TED Spread 36.5 -3.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap 3.75 -.75 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 66.73 +.13%
  • 3-Month T-Bill Yield 1.54% unch.
  • Yield Curve .30 unch.
  • China Iron Ore Spot 91.06 USD/Metric Tonne +2.21%
  • Citi US Economic Surprise Index -3.1 +.8 point
  • Citi Eurozone Economic Surprise Index 30.40 +1.3 points
  • Citi Emerging Markets Economic Surprise Index -14.3 -1.6 basis points
  • 10-Year TIPS Spread 1.79 +2.0 basis points
  • 28% chance of Fed rate cut at March 18th meeting, 9.3% chance of cut at April 29th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -199 open in Japan 
  • China A50 Futures: Indicating +26 open in China
  • DAX Futures: Indicating -2 open in Germany
Portfolio:
  • Higher: On gains in my medical/tech/biotech/retail sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:
  • Large-Cap Growth unch.
Sector Underperformers:
  • 1) Oil Service +1.6% 2) Gold & Silver -.2% 3) Social Media -.2%
Stocks Falling on Unusual Volume: 
  • MAXR
Stocks With Unusual Put Option Activity:
  • 1) SWN 2) WW 3) ACHN 4) SIG 5) FL
Stocks With Most Negative News Mentions:
  • 1) CLB 2) MDR 3) BA 4) BHI 5) T
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +.5%
Sector Outperformers:
  • 1) Disk Drives +.7% 2) Shipping +.6% 3) Energy +.6%
Stocks Rising on Unusual Volume:
  • MTOR, EOLS, EPZM, IIPR, PSNL, WW, NLTX, LGF/A, REAL, NGL, ADPT, CHNG, LVGO and CRNC
Stocks With Unusual Call Option Activity:
  • 1) MMP 2) FCEL 3) SWN 4) GES 5) HTZ
Stocks With Most Positive News Mentions:
  • 1) NIO 2) NHLD 3) NVDA 4) ATVI 5) NFLX
Charts:

Morning Market Internals

NYSE Composite Index:

Monday, December 30, 2019

Tuesday Watch

Night Trading 
  • Asian equity indices are -.75% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 53.25 +.25 basis point.
  • China Sovereign CDS 31.25 +.5 basis point.
  • Bloomberg Emerging Markets Currency Index  66.67 +.04%.
  • FTSE 100 futures -.35%.
  • S&P 500 futures +.13%.
  • NASDAQ 100 futures +.15%.

Earnings of Note 
Company/Estimate
Before the Open:
  • None of note
After the Close:
  • None of note
Economic Releases  
9:00 am EST
  • The FHFA House Price Index MoM for Oct. is estimated to rise +.4% versus a +.6% gain in Sept.
  • The S&P CoreLogic CS 20-City MoM for Oct. is estimated to rise +.3% versus a +.36% gain in Sept.
10:00 am EST
  • The Conference Board Consumer Confidence Index for Dec. is estimated to rise to 128.5 from 125.5 in Nov.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The end-of-year portfolio positioning could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and consumer shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Lower into Afternoon on Profit-Taking, Yen Strength, Technical Selling, Tech/Biotech Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Slightly Lower
  • Sector Performance: Mixed
  • Volume: Light
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 14.3 +6.3%
  • Euro/Yen Carry Return Index 126.73 -.2%
  • Emerging Markets Currency Volatility(VXY) 6.56 +.92%
  • S&P 500 Implied Correlation 43.42 -4.84%
  • ISE Sentiment Index 82.0 -7
  • Total Put/Call 1.08 +25.6%
  • NYSE Arms .63 -60.9%
Credit Investor Angst:
  • North American Investment Grade CDS Index 44.45 +.95%
  • America Energy Sector High-Yield CDS Index 542.0 -.70%
  • European Financial Sector CDS Index 51.72 -.89%
  • Italian/German 10Y Yld Spread 159.75 -3.25 basis points
  • Asia Ex-Japan Investment Grade CDS Index 53.18 +.10%
  • Emerging Market CDS Index 174.18 -.31%
  • iBoxx Offshore RMB China Corporate High Yield Index 167.41 +.04%
  • 2-Year Swap Spread 10.75 +1.25 basis points
  • TED Spread 39.5 -1.0 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap 4.5 +5.5 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 66.69 +.19%
  • 3-Month T-Bill Yield 1.54% -2.0 basis point
  • Yield Curve .30 +3.0 basis points
  • China Iron Ore Spot 89.57 USD/Metric Tonne +.11%
  • Citi US Economic Surprise Index -3.9 +4.4 points
  • Citi Eurozone Economic Surprise Index 29.10 +1.2 points
  • Citi Emerging Markets Economic Surprise Index -12.7 +3.2 basis points
  • 10-Year TIPS Spread 1.77 +1.0 basis point
  • 5.9% chance of Fed rate cut at March 18th meeting, 12.7% chance of cut at April 29th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -131 open in Japan 
  • China A50 Futures: Indicating -11 open in China
  • DAX Futures: Indicating -94 open in Germany
Portfolio:
  • Slightly Lower: On losses in my medical/tech/biotech sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long