Wednesday, January 31, 2024

Thursday Watch

Evening Headlines

Bloomberg: 

Zero Hedge:

Wall Street Journal:

Newsmax:
TheGatewayPundit.com:

The Epoch Times:

X:
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -1.0% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 103.0 +1.5 basis points.
  • China Sovereign CDS 67.0 +2.25 basis points.
  • China Iron Ore Spot 130.1 USD/Metric Tonne +.2%.
  • Bloomberg Emerging Markets Currency Index 40.8 -.03%.
  • Bloomberg Global Risk-On/Risk Off Index 57.3 -.6%.
  • Volatility Index(VIX) futures 15.7 -.2%.
  • Euro Stoxx 50 futures -.17%.
  • S&P 500 futures +.20%.
  • NASDAQ 100 futures +.33%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial 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 Diminished Fed Rate-Cut Hopes, Earnings Outlook Concerns, Regional Bank Worries, Tech/Financial Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 14.0 +5.0%
  • DJIA Intraday % Swing .44% +15.0%
  • Bloomberg Global Risk On/Risk Off Index 58.6 -3.9%
  • Euro/Yen Carry Return Index 171.2 -.9%
  • Emerging Markets Currency Volatility(VXY) 7.3 unch.
  • CBOE S&P 500 Implied Correlation Index 18.4 +9.6% 
  • ISE Sentiment Index 149.0 +18.0
  • Total Put/Call .84 -5.6%
  • NYSE Arms .83 -30.8% 
  • NYSE Non-Block Money Flow -$46.8M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.3 +2.1%
  • US Energy High-Yield OAS 331.62 +3.6%
  • Bloomberg TRACE # Distressed Bonds Traded 310 +3
  • European Financial Sector CDS Index 68.93 +2.2% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 201.30 +4.9%
  • Italian/German 10Y Yld Spread 156.0 basis points +3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 100.81 -.59%
  • Emerging Market CDS Index 180.18 +1.4%
  • Israel Sovereign CDS 129.7 +.02%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.44 +.10%
  • 2-Year SOFR Swap Spread -14.75 basis points -.75 basis point
  • Treasury Repo 3M T-Bill Spread 4.25 basis points -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -10.5 -6.0 basis points
  • MBS  5/10 Treasury Spread 138.0 -5.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 897.0 -12.0 basis points
  • Avg. Auto ABS OAS 70.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.79 -.01%
  • 3-Month T-Bill Yield 5.36% +1.0 basis point
  • China Iron Ore Spot 130.0 USD/Metric Tonne +.16%
  • Dutch TTF Nat Gas(European benchmark) 30.2 euros/megawatt-hour +2.2%
  • Citi US Economic Surprise Index 25.7 -2.1 points
  • Citi Eurozone Economic Surprise Index -1.1 +.2 point
  • Citi Emerging Markets Economic Surprise Index -1.5 +2.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(176 of 500 reporting) +.4% +7.7 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.75 +.03:  Growth Rate +10.1% unch., P/E 20.0 -.2
  • S&P 500 Current Year Estimated Profit Margin 11.48% -6.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(4 of 10 reporting) +31.1% +47.7 percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 294.58 -.02: Growth Rate +38.1% unch., P/E 30.9 -.9
  • Bloomberg US Financial Conditions Index .94 unch.
  • Bloomberg Euro-Zone Financial Conditions Index .76 +3.0 basis points
  • US Yield Curve -29.25 basis points (2s/10s) +1.0 basis point
  • US Atlanta Fed 1Q GDPNow Forecast +3.0% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 64.4% -.3 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.96% unch.
  • 10-Year TIPS Spread 2.25 -1.0 basis point
  • Highest target rate probability for March 20th FOMC meeting: 62.5%(+3.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for May 1st meeting: 58.6%(+4.4 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -306 open in Japan 
  • China A50 Futures: Indicating +13 open in China
  • DAX Futures: Indicating -1 open in Germany
Portfolio:
  • Lower:  On losses in my consumer discretionary/industrial/tech/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  • Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth -1.3%
Sector Underperformers:
  • 1) Regional Banks -3.8% 2) Networking -2.3% 3) Internet -1.6%
Stocks Falling on Unusual Volume: 
  • CSWC, ENVA, SANM, BOOM, OZK, EGBN, GOOG, TER, ROK, MKTX, EXTR and AMSC
Stocks With Unusual Put Option Activity:
  • 1) NYCB 2) FGEN 3) CBAY 4) ETN 5) FAST
Stocks With Most Negative News Mentions:
  • 1) NYCB 2) ROK 3) EXTR 4) CRCW 5) GPI
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Value +.1%
Sector Outperformers:
  • 1) Medical Equipment +1.8% 2) Alt Energy +1.5% 3) Pharma +.8%
Stocks Rising on Unusual Volume:
  • CCTG, ASH, RUN, SPR, MANH, DWAC, PARA, NOVA, SYK, EAT, EW, TEVA, VERA, CGEM, ZGN, KALV, TGI, RNR, NVO, SLGN, FTV, BA, IMCR, RDY, PCVX, CLS, ALPN, COR, ATGE, ZBH, ADP, FUSN, ZIM, CVLT, EQR, PII, MBUU, PII, LUNG, MMYT and CCL
Stocks With Unusual Call Option Activity:
  • 1) NYCB 2) FGEN 3) CBAY 4) ETN 5) FAST
Stocks With Most Positive News Mentions:
  • 1) PLUG 2) POWL 3) MANH 4) PARA 5) EW

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (MO)/1.18
  • (BDX)/2.40
  • (BC)/1.65
  • (CAH)/1.60
  • (ETN)/2.47
  • (HON)/2.59
  • (ITW)/2.41
  • (IP)/.34
  • (MRK)/-.11
  • (PH)/5.26
  • (PTON)/-.54
  • (PBI)/.02
  • (DGX)/2.11
  • (RCL)/1.14
  • (SBH)/.37
  • (SNY)/.17
  • (SIRI)/.08
  • (SWK)/.79
  • (TSCO)/2.22
  • (TT)/2.13
After the Close: 
  • (AMZN)/.80
  • (AAPL)/2.10
  • (BZH)/.71
  • (CLX)/1.09
  • (DECK)/11.45
  • (HUBG)/.52
  • (META)/4.83
  • (MCHP)/1.04
  • (SKYW)/.15
  • (X)/.28
  • (WYNN)/1.14
Economic Releases

7:30 am EST

  • Challenger Job Cuts YoY for Jan.

8:30 am EST

  • 4Q Non-Farm Productivity is estimated to rise +2.5% versus a +5.2% gain in 3Q.
  • 4Q Unit Labor Costs are estimated to rise +1.2% versus a -1.2% decline in 3Q.
  • Initial Jobless Claims for last week are estimated to fall to 212K versus 214K the prior week.
  • Continuing Claims are estimated to rise to 1838K versus 1833K prior.
10:00 am EST
  • Construction Spending MoM for Dec. is estimated to rise +.5% versus a +.4% gain in Nov.
  • ISM Manufacturing for Jan. is estimated at 47.2 versus 47.2 in Dec. 
  • ISM Prices Paid for Jan. is estimated to rise to 46.2 versus 45.2 in Dec.
Afternoon
  • Wards Total Vehicle Sales for Jan. is estimated to fall to 15.7M versus 15.83M in Dec.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The US govt. funding deadline, weekly EIA natural gas inventory report, (DOX) annual meeting, (TXN) business update and the (PSMT) annual meeting could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

  • Volume Running +7.9% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 9.6 -.2
  • 7 Sectors Declining, 4 Sectors Rising
  • 41.2% of Issues Advancing, 56.2% Declining 
  • TRIN/Arms .87 -27.6% 
  • Non-Block Money Flow -$41.5M
  • 130 New 52-Week Highs, 21 New Lows
  • 62.3%(-.1%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 67.0 +2.0
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 57.5 -5.7%
  • Bloomberg Cyclicals/Defensives Pair Index 137.2 -.84%
  • Russell 1000: Growth/Value 18,737.6 -1.3%
  • CNN Fear & Greed Index 69.0 (Greed) -5.0
  • 1-Day Vix 14.0 -3.1%
  • Vix 14.2 +7.0%
  • Total Put/Call .87 -2.3%

Tuesday, January 30, 2024

Wednesday Watch

X:

OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.5% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 101.5 +.25 basis point.
  • China Sovereign CDS 64.75 unch.
  • China Iron Ore Spot 131.6 USD/Metric Tonne -1.0%.
  • Bloomberg Emerging Markets Currency Index 40.8 -.03%.
  • Bloomberg Global Risk-On/Risk Off Index 59.3 -2.8%.
  • Volatility Index(VIX) futures 14.2 +1.1%.
  • Euro Stoxx 50 futures -.13%.
  • S&P 500 futures -.38%.
  • NASDAQ 100 futures -.82%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 75% net long heading into the day.