Friday Watch

Night Trading 

• Asian equity indices are unch.  to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 66.75 unch. 

• Asia Pacific Sovereign CDS Index 13.0 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 74.18 +.2%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases

• None of note

Upcoming Splits

• (NEOG) 4-for-3

Other Potential Market Movers

• The German CPI report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and industrial 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 Slightly Higher into Final Hour on Economic Optimism, Oil Gain, Seasonality, Homebuilding/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 10.15 -3.06%

• Euro/Yen Carry Return Index 140.58 +.15%

• Emerging Markets Currency Volatility(VXY) 7.82 -.51%

• S&P 500 Implied Correlation 38.48 +.03%

• ISE Sentiment Index 102.0 +18.6%
  

• Total Put/Call .95 unch.

• NYSE Arms .86 -40.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.38 +1.12%
  

• America Energy Sector High-Yield CDS Index 371.0 -.62%

• European Financial Sector CDS Index 43.55 -.07%

• Western Europe Sovereign Debt CDS Index 3.96 n/a

• Asia Pacific Sovereign Debt CDS Index 13.07 -1.28%

• Emerging Market CDS Index 120.04 -.42%
  

• iBoxx Offshore RMB China Corporate High Yield Index 145.93 +.15%

• 2-Year Swap Spread 18.0 +.75 basis point

• TED Spread 26.75 +4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -18.0 +41.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 74.18 +.20%
• 3-Month T-Bill Yield 1.38% -6.0 basis points
  

• Yield Curve 52.5 +.25 basis point

• China Iron Ore Spot 490.50 CNY/100 Metric Tonnes +.41%

• Citi US Economic Surprise Index 77.10 -1.8 points

• Citi Eurozone Economic Surprise Index 49.80 -.4 basis point

• Citi Emerging Markets Economic Surprise Index -3.30 -1.0 basis point

• 10-Year TIPS Spread 1.97 +2.0 basis points
  
• 69.0% chance of Fed rate hike at March 21 meeting, 71.0% chance at May 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +61 open in Japan 
• China A50 Futures: Indicating +65 open in China

• DAX Futures: Indicating +17 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value +.1%

Sector Underperformers:

• 1) Road & Rail -.6% 2) Computer Hardware -.5% 3) Gaming -.5%

Stocks Falling on Unusual Volume: 

• RGLD and NETE

Stocks With Unusual Put Option Activity:

• 1) WATT 2) MON 3) AEO 4) EFA 5) UNG

Stocks With Most Negative News Mentions:

• 1) RIOT 2) EKSO 3) RGLD 4) RVLT 5) MO

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.2%

Sector Outperformers:

• 1) Coal +2.5% 2) Alt Energy +.7% 3) Shipping +.7%

Stocks Rising on Unusual Volume:

• WATT, OTEX, TCCO, CGBD, DQ, WLKP, BOOM, APPN, CVGW, AMBC, CMCM, TCP, SPKE, SFBS, MTN, NEOG, FFIN, NFLX, HCM, NWN, ARD, SUPN, INTL, SMG and MGEE

Stocks With Unusual Call Option Activity:

• 1) WATT 2) RCL 3) ALK 4) MON 5) UPL

Stocks With Most Positive News Mentions:

• 1) WATT 2) FCX 3) MANH 4) SBUX 5) CXO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -36.7% Below 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 52.0% of Issues Advancing, 43.0% Declining
• 80 New 52-Week Highs, 16 New Lows
• 61.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.8%
• Vix 10.3 -1.9%
• Total Put/Call .88 -7.4%
• TRIN/Arms .90 -37.9%

Thursday Watch

Night Trading 

• Asian equity indices are unch.  to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 66.75 -1.25 basis points. 

• Asia Pacific Sovereign CDS Index 13.25 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 73.87 .

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases

8:30 am EST

• The Advance Goods Trade Balance for November is estimated at -$67.9B versus -$68.1B in October.
• Wholesale Inventories MoM for November is estimated to rise +.3% versus a -.5% decline in October.
• Initial Jobless Claims for last week are estimated to fall to 240K versus 245K the prior week.
• Continuing Claims are estimated to fall to 1900K versus 1932K prior.

9:45 am EST

• Chicago Purchasing Manager for December is estimated to fall to 62.0 versus 63.9 in November.
  

11:00 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,844,200 barrels versus a -6,495,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,290,300 barrels versus a +1,237,000 barrel gain the prior week. Distillate inventories are estimated to rise by +85,600 barrels versus a +769,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.15% versus a +.7% gain prior.
  

Upcoming Splits

• (NEOG) 4-for-3

Other Potential Market Movers

• The China Account Balance, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the $26B 5Y T-Note auction could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by technology and industrial 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.