Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 77.5 -.25 basis point. 
• Asia Pacific Sovereign CDS Index 13.0 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 74.94 -.02%.
• FTSE 100 futures -.62%.
• S&P 500 futures -1.04%.
• NASDAQ 100 futures -1.15%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (GBX)/.97

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for March is estimated to fall to 185K versus 313K in February. 
• The Unemployment Rate is estimated to fall to 4.0% versus 4.1% in February.
• Average Hourly Earnings MoM for March are estimated to rise +.3% versus a +.1% gain in February.
  

3:00 pm EST

• Consumer Credit for February is estimated to rise to $15.5B versus $13.91B in January.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking and the German Industrial Production report could also impact trading today.

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

Stocks Surging into Final Hour on Diminishing Trade War Fears, Earnings Optimism, Yen Weakness, Commodity/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.0 -5.1%

• Euro/Yen Carry Return Index 136.88 +.26%

• Emerging Markets Currency Volatility(VXY) 8.20 -.85%

• S&P 500 Implied Correlation 46.1 -5.0%

• ISE Sentiment Index 128.0 +1.0%
  

• Total Put/Call .77 -23.8%

• NYSE Arms .60 -17.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.18 -2.66%
  

• America Energy Sector High-Yield CDS Index 464.0 -1.42%

• European Financial Sector CDS Index 62.2 -5.15%

• Italian/German 10Y Yld Spread 127.0 +2.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.97 -2.41%

• Emerging Market CDS Index 132.88 -1.62%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.63 +.02%

• 2-Year Swap Spread 31.75 +.75 basis point

• TED Spread 62.0 +4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -10.5 +4.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 74.96 -.26%
• 3-Month T-Bill Yield 1.71% +1.0 basis point
  

• Yield Curve 52.5 +2.0 basis points

• China Iron Ore Spot 63.32 USD/Metric Tonne +1.57%

• Citi US Economic Surprise Index 44.0 -2.8 points

• Citi Eurozone Economic Surprise Index -72.50 -7.5 points

• Citi Emerging Markets Economic Surprise Index 23.80 -3.1 points

• 10-Year TIPS Spread 2.09 unch.
  
• 79.9% chance of Fed rate hike at June 13 meeting, 81.6% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +301 open in Japan 
• China A50 Futures: Indicating +215 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them 

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth +.3%

Sector Underperformers:

• 1) Biotech -1.7% 2) Semis -1.6% 3) Disk Drives -1.3%

Stocks Falling on Unusual Volume: 

• CLLS, CONN, MU, INNT and ANAB

Stocks With Unusual Put Option Activity:

• 1) FITB 2) HES 3) LFIN 4) K 5) CL

Stocks With Most Negative News Mentions:

• 1) CNAT 2) XRF 3) UA 4) OLLI 5) PFE

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.9%

Sector Outperformers:

• 1) Oil Service +4.1% 2) Steel +2.7% 3) Homebuilding +2.2%

Stocks Rising on Unusual Volume:

• LFIN, IEFA, ICPT, EHIC, CYOU, IGV, BREW, GMS, IMO, VERI, AVHI, LW, PLSE, VNOM, TSLA, HOME, MOV, NEWA, REGI, KEX, MRC, IBKR, CIB, FNSR, APOG, CRZO, ACXM and TK

Stocks With Unusual Call Option Activity:

• 1) BYD 2) ITB 3) KSU 4) FAST 5) HAIN

Stocks With Most Positive News Mentions:

• 1) AYI 2) FNSR 3) AMD 4) BA 5) LEN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -5.4% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 69.4% of Issues Advancing, 27.7% Declining
• 40 New 52-Week Highs, 10 New Lows
• 40.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.6%
• Vix 19.2 -4.4%
• Total Put/Call .67 -33.7%
• TRIN/Arms .48 -33.1%

Thursday Watch

Night Trading 

• Asian equity indices are +.75% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 77.75 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 13.25 unch.

• Bloomberg Emerging Markets Currency Index 75.15 -.01%.

• FTSE 100 futures +1.4%.

• S&P 500 futures +.40%.

• NASDAQ 100 futures +.50%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CONN)/.54

• (MON)/3.31

• (SCHN)/.91

• (PSMT)/.90

• (WDFC)/.95

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for March.

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 225K versus 215K the prior week.

• Continuing Claims are estimated to fall to 1843Kversus 1871K prior.

• The Trade Deficit for February is estimated at -$56.8B versus -$56.6B in January.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Factory Orders report, Eurozone Services PMI report, Eurozone PPI report, Eurozone Retail Sales report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (NTAP) analyst day 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 modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.