Stocks Substantially Higher into Final Hour on Global Stimulus Hopes, Less European/Emerging Markets/US High-Yield Debt Angst, Short-Covering, Defense/Utility Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 60.1 -6.3%

• Euro/Yen Carry Return Index 125.33 -.23%

• Emerging Markets Currency Volatility(VXY) 12.41 -.16%

• S&P 500 Implied Correlation 68.23 +10.3%

• ISE Sentiment Index 68.0 -7
  

• Total Put/Call .93 -2.11%

• NYSE Arms 1.36 +22.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 97.95 -5.24%
  

• America Energy Sector High-Yield CDS Index 1,399.0 -5.62%

• European Financial Sector CDS Index 98.05 -3.52%

• Italian/German 10Y Yld Spread 158.75 -21.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.0 -12.9%
  

• Emerging Market CDS Index 293.0 -5.2%
  

• iBoxx Offshore RMB China Corporate High Yield Index 169.79 -.10%

• 2-Year Swap Spread 23.25 +3.75 basis points

• TED Spread 133.0 +8.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 24.5 +17.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.41 +1.14%
• 3-Month T-Bill Yield -.09% -2.0 basis points

• Yield Curve .48 -1.0 basis point

• China Iron Ore Spot 83.65 USD/Metric Tonne -1.72%

• Citi US Economic Surprise Index 1.0 -60.7 points

• Citi Eurozone Economic Surprise Index -58.50 -3.6 points

• Citi Emerging Markets Economic Surprise Index -44.4 +4.2 points

• 10-Year TIPS Spread 1.08 +3.0 basis points
• n/a chance of no change at April 29th meeting, n/a chance of no change at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +835 open in Japan 
• China A50 Futures: Indicating +207 open in China

• DAX Futures: Indicating -71 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/industrial/medical/consumer staple sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and emerging market shorts, then added some back

• Market Exposure: Moved to 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +73.2% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 89.1% of Issues Advancing, 10.0% Declining
• 4 New 52-Week Highs, 11 New Lows
• 3.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 34.1%
• Vix 58.5 -8.8%
• Total Put/Call .780 -15.8%
• TRIN/Arms .58 -46.9%

Thursday Watch

Evening Headlines

Bloomberg:       

• Stimulus Vote Timing in Doubt Amid Dispute Over Unemployment Aid.  
• Spanish Doctors Are Forced to Choose Who to Let Die. 
• Singapore Expects Sharp Contraction in 2020 Economy as Quarterly GDP Plunges.
• Fauci Says Coronavirus Might Become a Seasonal Cycle.
• Deaths Top 20,000; Tokyo Residents to Stay Inside: Virus Update. 
• Asian Stocks Set for Mixed Start; Yen Climbs: Markets Wrap. Asian stocks were poised for a mixed start, following the first back-to-back gains for global equities since mid-February, as negotiations in Congress continued toward a vote on the U.S. stimulus bill later this week. S&P 500 futures fluctuated in Asia after the benchmark’s rally of more than 5% fizzled amid a dispute in the Senate. Contracts in Japan slipped, while those in Hong Kong and Australia gained. Australian shares opened higher. Republican senators raised objections to the unemployment benefits section of the stimulus bill, and Vermont Senator Bernie Sanders threatened to hold up the legislation unless those objections were dropped. The dollar stabilized after declining for a second day against its major peers, and the yen gained. The Australian and New Zealand dollars declined as much as 1%. Treasuries edged lower Wednesday. S&P 500 futures fell 0.4% as of 8:20 a.m. in Tokyo. The S&P 500 Index rose 1.2% on Wednesday. Futures on Japan’s Nikkei 225 slid 1.9%. Hang Seng Index futures added 0.9%. Australia’s S&P/ASX 200 Index gained 1.7%.   
• U.S. Calling on Saudis to Halt Plan to Unleash Record Oil Supply.   
• Five Things You Need to Know to Start Your Day.  
• China Shock Result, Fed’s $4.5 Trillion, Japan Playbook: Eco Day.
• NYC’s 911 Overwhelmed With Record Number of Emergency Medical Calls.  
• Wall Street Bonuses Could Fall 40% This Year in ‘Perfect Storm’.
• Stimulus Bill Has $400 Million in Election Help for States.

Wall Street Journal:  

• Coronavirus Leaves Older Americans Cut Off: ‘We Have Been Trying to Fill That Void’.
• Coronavirus Is Advancing on Poor Nations, and the Prognosis Is Troubling.
• Coronavirus Stimulus Package Hits Last-Minute Snags.
• Coronavirus Shows Cash Is King, Even for Biggest U.S. Companies.
• Texas Company Is Inundated With Orders for Oxygen Device.

CNBC.com:

• Coronavirus live updates: Hundreds flood NYC hospital ICU, ERs; global cases top 466,000.
• Jim Cramer: Wall Street ‘has faith’ in stimulus plan; ‘total lockdown’ is needed.
• Yum Brands suspends $2 billion buyback program, provides royalty grace period for franchisees.
• Stocks making the biggest moves after hours: Micron, Shoe Carnival, Ford & more.
• Salesforce(CRM) promises no ‘significant’ layoffs for three months despite coronavirus.

Fox News:

• Bernie threatens to stall massive coronavirus aid package in fight with GOP senators.
• NYC hospitals stretched far too thin during virus, Dr. Siegel warns.

MarketWatch.com:       

• Opinion: These are the 20 stocks corporate insiders have been buying most amid the coronavirus-induced market selloff.
• Why the commercial mortgage bond market looks dire right now.

Zero Hedge:

• Traders Puke After Bernie Sanders Threatens To Hold Up Coronavirus Package.
• 200 NYPD Officers Test Positive For COVID-19 As NYC Cements Its Position As 'Epicenter' Of US Outbreak: Live Updates.
• Missing Ex-FBI Agent Robert Levinson Declared Dead By Family.
• All T-Bills Up To 3 Months Now Have Negative Yields.
• As Bodies Pile Up, States Ask Emergency FEMA Help To Handle The Dead.
• 47,000 Stores Shutter Across The US As Virtually All Retailers Stop Paying Rent.
• New Jersey "Knucklehead" Faces Terror Charges For Coughing On Grocery Store Clerk.
• 10 Amazon Warehouses Hit With COVID-19 After Workers Test Positive.
• Mario Draghi Urges "War-like" Flood Of Debt As ECB Considers Launching Helicopter Money.
• Pompeo Denounces China's "Wuhan Virus Disinformation Campaign" Before G7 Leaders.
• Bond Market Tears In Two: Distressed Debt Is Cratering, As Fed Buying Of Investment Grade Sends LQD NAV Soaring.
• China Lifts Lockdown On Hubei Province Despite COVID-19 Resurgence.
• Apple Tumbles After Report Says 5G iPhone Could Be Delayed To 2021.
• S&P Downgrades Ford To Junk - Biggest Fallen Angel Yet.
• Unprecedented Collapse: US Airline Traffic Currently Just 10% Of Normal.
• Stocks Scream Higher On Greatest Short-Squeeze In History, Bonds & Bullion Shrug.

Business Insider: 

• Spain reports 738 deaths in one day, surpassing China.
• The 28 US cities with the largest elderly populations.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Google Docs:

• Coronavirus Testing by State.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 134.5 -36.0 basis points.

• China Sovereign CDS 44.0 -17.5 basis points.

• Bloomberg Emerging Markets Currency Index  58.79 +.09%.
• Euro Stoxx 50 futures +.11%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CSIQ)/.43
• (FDS)/2.49
• (LK)/-.13
• (MOV)/.21
• (SIG)/3.49
• (TITN)/.01
• (WOR)/.68

After the Close:

• (GME)/.79
• (JEF)/.21
• (KBH)/.44
• (LULU)/2.25
• (RH)/3.59

Economic Releases 
8:30 am EST

• Advance Goods Trade Balance for Feb. is estimated at -$63.4B versus -$65.9B in Jan.
• Wholesale Inventories MoM for Feb. is estimated to fall -.2% versus a -.4% decline in Jan.
• Retail Inventories MoM for Feb. is estimated to fall -.1% versus unch. in Jan.
• Initial Jobless Claims for last week are estimated to rise to 1500K versus 281K the prior week. 
• Continuing Claims are estimated to rise to 1791K versus 1701K prior.
  

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for March is estimated to fall to -10 versus 5 in Feb.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The BoE rate decision, weekly EIA Natural Gas inventory report and the $32B 7Y T-Note auction could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and commodity shares in the region. I expect US stocks to open lower and to rally into the afternoon, finishing mixed. The Portfolio is 25% net long heading into the day.

Stocks Surging into Final Hour on Global Stimulus Hopes, Oil Gain, Short-Covering, Homebuilding/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 62.40 +1.0%

• Euro/Yen Carry Return Index 125.50 +.78%

• Emerging Markets Currency Volatility(VXY) 12.61 -4.9%

• S&P 500 Implied Correlation 69.45 +12.8%

• ISE Sentiment Index 75.0 +15
  

• Total Put/Call .89 +1.14%

• NYSE Arms .73 +.46%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.33 -11.2%
  

• America Energy Sector High-Yield CDS Index 1,469.0 -5.32%

• European Financial Sector CDS Index 102.16 -7.71%

• Italian/German 10Y Yld Spread 180.5 -8.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 151.39 -19.3%
  

• Emerging Market CDS Index 294.30 -16.5%
  

• iBoxx Offshore RMB China Corporate High Yield Index 169.96 -.08%

• 2-Year Swap Spread 19.5 +6.75 basis points

• TED Spread 125.0 +1.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 7.5 +8.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.81 +.89%
• 3-Month T-Bill Yield -.07% -3.0 basis points

• Yield Curve .49 -1.0 basis point

• China Iron Ore Spot 85.17 USD/Metric Tonne +4.52%

• Citi US Economic Surprise Index 61.70 -.6 point

• Citi Eurozone Economic Surprise Index -54.90 -.1 point

• Citi Emerging Markets Economic Surprise Index -28.6 +.1 point

• 10-Year TIPS Spread 1.05 +8.0 basis points
• n/a chance of no change at April 29th meeting, n/a chance of no change at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +200 open in Japan 
• China A50 Futures: Indicating +104 open in China

• DAX Futures: Indicating +50 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/industrial/medical sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and emerging market shorts

• Market Exposure: Moved to 75% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +95.2% Above 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 55.0% of Issues Advancing, 43.4% Declining
• 0 New 52-Week Highs, 30 New Lows
• 2.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 34.1%
• Vix 64.4 +4.5%
• Total Put/Call .73 -17.1%
• TRIN/Arms 1.53 +206.0%