Morning Market Internals

NYSE Composite Index:

• Volume Running +12.5% Above 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 43.6% of Issues Advancing, 52.9% Declining
• 125 New 52-Week Highs, 7 New Lows
• 58.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.2%
• Vix 11.8 -2.0%
• Total Put/Call .82 -19.6%
• TRIN/Arms 1.24 -7.8%

Wednesday Watch

Night Trading 

• Asian equity indices are -.50% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 113.5 -1.25 basis points.
• Asia Pacific Sovereign CDS Index 32.0 -.75 basis point.
• Bloomberg Emerging Markets Currency Index 70.79 unch. 
• S&P 500 futures +.05%. 
• NASDAQ 100 futures +.24%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (MO)/.67
• (ANTM)/1.67
• (ADP)/,81
• (AVY)/.93
• (BAX)/.52
• (IR)/.92
• (JCI)/.52
• (MDC)/.67
• (PBI)/.57
• (TUP)/1.37
• (ALL)/1.60
• (CRUS)/1.62
• (FB)/1.31
• (IAC)/.95
• (LSTR)/.87
• (LM)/.65
• (MET)/1.34
• (OI)/.48
• (RGLD)/.38
• (SYMC)/.28
• (TSCO)/.91
• (WFT)/-.33 

Economic Releases 
8:15 am EST

• The ADP Employment Change for January is estimated to rise to 168K versus 153K in December.

9:45 am EST

• Final Markit US Manufacturing PMI for January is estimated at 55.1 versus a prior estimate of 55.1.
  

10:00 am EST

• ISM Manufacturing for January is estimated to rise to 55.0 versus 54.7 in December.
• ISM Prices Paid for January is estimated at 65.5 versus 65.5 in December.
• Construction Spending MoM for December is estimated to rise +.2% versus a +.9% gain in November.   

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,550,090 barrels versus a +2,840,000 barrel gain the prior week.  Gasoline supplies are estimated to rise by +1,363,640 barrels versus a +6,796,000 barrel gain the prior week. Distillate supplies are estimated to fall by -336,000 barrels versus a +76,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall -.11% versus a -2.4% decline prior.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at .5-.75%.

Afternoon:

• Total Vehicle Sales for January are estimated to fall to 17.5M versus 18.29M in December.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PMI report, weekly MBA mortgage applications report and the (F) sales conference call could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Earnings Outlook Concerns, Yen Strength, Profit-Taking, Homebuilding/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.88 +8.4%

• Euro/Yen Carry Return Index 127.02 +.09%

• Emerging Markets Currency Volatility(VXY) 10.74 unch.

• S&P 500 Implied Correlation 47.95 -.27%

• ISE Sentiment Index 76.0 -15.6%
  

• Total Put/Call 1.07 -.93%

• NYSE Arms 1.37 -6.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.50 +1.60%
  

• America Energy Sector High-Yield CDS Index 413.0 -.45%

• European Financial Sector CDS Index 90.32 +.88%

• Western Europe Sovereign Debt CDS Index 21.67 -6.03%

• Asia Pacific Sovereign Debt CDS Index 31.91 -2.76%

• Emerging Market CDS Index 236.83 +.06%
  

• iBoxx Offshore RMB China Corporate High Yield Index 133.50 +.02%

• 2-Year Swap Spread 29.50 -.5 basis point

• TED Spread 52.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -29.25 +3.75 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.78 +.25%
• 3-Month T-Bill Yield .51% +1.0 basis point

• Yield Curve 124.0 -4.0 basis points
  

• China Import Iron Ore Spot $83.34/Metric Tonne n/a

• Citi US Economic Surprise Index 31.80 +.2 point

• Citi Eurozone Economic Surprise Index 55.30 +.3 point

• Citi Emerging Markets Economic Surprise Index 37.10 +.4 point

• 10-Year TIPS Spread 2.06 -1.0 basis point
• 32.9% chance of Fed rate hike at March 15 meeting, 46.3% chance at May 3 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -59 open in Japan 
• China A50 Futures: Indicating n/a open in China

• DAX Futures: Indicating +56 open in Germany

Portfolio: 

• Slightly Higher: On gains in my in my biotech/medical 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 -.5%

Sector Underperformers:

• 1) Steel -1.9% 2) Semis -1.7% 3) Homebuilders -1.6%

Stocks Falling on Unusual Volume: 

• UA, NRZ, SMLP, ESTE, TMHC, UPS, RMBS, CR, TPX, AEIS, TEVA, HOG, UVV, IDTI, GBX, SM, CNX, ARRS, SFL, VLO, LPG and RYAM

Stocks With Unusual Put Option Activity:

• 1) EA 2) CNX 3) ETP 4) UPS 5)ATVI

Stocks With Most Negative News Mentions:

• 1) UA 2) RRTS 3) BWLD 4) AAL 5) TPX

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth unch.

Sector Outperformers:

• 1) Gold & Silver +2.5% 2) Utilities +1.4% 3) Biotech +1.2%

Stocks Rising on Unusual Volume:

• MNTA, SANM, NTCT, CYNO, SFR, CLH, COH, ALLY, TMO, GKOS, AXE, USLV, CARA, HUBB, PEI, AOBC, TLYS, TUP, ABC, UDR, RGR and CBL

Stocks With Unusual Call Option Activity:

• 1) ILG 2) NBR 3) ETN 4) UPS 5) BAX

Stocks With Most Positive News Mentions:

• 1) TLYS 2) CLH 3) SHOO 4) EXC 5) CBOE

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running +8.9% Above 100-Day Average
• 2 Sectors Rising, 8 Sectors Declining
• 46.1% of Issues Advancing, 50.4% Declining
• 47 New 52-Week Highs, 18 New Lows
• 57.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.8%
• Vix 12.9 +8.7%
• Total Put/Call 1.12 +3.7%
• TRIN/Arms 1.33 -9.2%