Thursday Watch

Night Trading 

• Asian equity indices are -.5% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 76.75 +.75 basis point. 
• Asia Pacific Sovereign CDS Index 12.5 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 74.57 -.02%.
• FTSE 100 futures -.13%.
• S&P 500 futures +.24%.
• NASDAQ 100 futures +.38%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (APOG)/.76
• (OZRK)/.85
• (BLK)/6.41
• (DAL)/.73
• (RAD)/-.02

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 230K versus 242K the prior week.
• Continuing Claims are estimated to rise to 1843K versus 1808K prior. 
• The Import Price Index MoM for March is estimated to rise +.1% versus a +.4% gain in February.
• The Export Price Index MoM for March is estimated to rise +.2% versus a +.2% gain in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kashkari speaking, Eurozone Industrial Production report, $13B 30Y T-Note auction, weekly EIA natural gas inventory report, Bloomberg April US Economic Survey, weekly Bloomberg Consumer Comfort Index, (BKE)/(CATO)/(LB) monthly sales reports and the (CLDR) analyst day could also impact trading today.

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

Stocks Lower into Final Hour on Geopolitical Tensions, Mueller Probe Worries, Yen Strength, Financial/Gaming Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.9 -2.6%

• Euro/Yen Carry Return Index 137.68 -.18%

• Emerging Markets Currency Volatility(VXY) 8.47 unch.

• S&P 500 Implied Correlation 48.7 -2.2%

• ISE Sentiment Index 116.0 unch.
  

• Total Put/Call .94 +10.6%

• NYSE Arms .95 +98.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.71 -.95%
  

• America Energy Sector High-Yield CDS Index 437.0 -3.51%

• European Financial Sector CDS Index 60.40 -.13%

• Italian/German 10Y Yld Spread 130.50 +2.5 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.44 +1.93%

• Emerging Market CDS Index 140.37 -.02%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.87 +.03%

• 2-Year Swap Spread 29.5 -1.25 basis points

• TED Spread 61.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.0 -1.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 74.62 +.23%

• 3-Month T-Bill Yield 1.73% +1.0 basis point
  

• Yield Curve 48.0 -.75 basis point

• China Iron Ore Spot 65.20 USD/Metric Tonne +1.56%

• Citi US Economic Surprise Index 31.30 -1.5 points

• Citi Eurozone Economic Surprise Index -88.20 +.8 point

• Citi Emerging Markets Economic Surprise Index 19.10 -3.0 points

• 10-Year TIPS Spread 2.11 +2.0 basis points
  

• 84.3% chance of Fed rate hike at June 13 meeting, 85.2% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +43 open in Japan 

• China A50 Futures: Indicating +27 open in China

• DAX Futures: Indicating -4 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.3%

Sector Underperformers:

• 1) Homebuilders -1.0% 2) Gaming -.8% 3) Banks -.7%

Stocks Falling on Unusual Volume: 

• CARG, ALOG, FAST, MSM, ICPT and SGRY

Stocks With Unusual Put Option Activity:

• 1) ANF 2) NEM 3) HLT 4) S 5) EVHC

Stocks With Most Negative News Mentions:

• 1) ALOG 2) CAR 3) MITL 4) UAL 5) WFC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.5%

Sector Outperformers:

• 1) Oil Service +3.0% 2) Energy +1.6% 3) Defense +1.3%

Stocks Rising on Unusual Volume:

• HLT, CBAY, SPPI, AVAV, NEWA, CURO, VNOM, SCSC, AVXS, CIB, YNDX, KL, CUK, ACAD, RIG, IGV, AAOI, SAIL, CATM, IFRX, TBK, AMBA, NBLX, CCK, SYNA and SPPI

Stocks With Unusual Call Option Activity:

• 1) PSX 2) VHC 3) LB 4) BBBY 5) HLT

Stocks With Most Positive News Mentions:

• 1) AVAV 2) AAOI 3) CBAY 4) SYNA 5) EBAY

Charts:

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

Market Internals

NYSE Composite Index:

• Volume Running -9.3% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 55.7% of Issues Advancing, 40.3% Declining
• 41 New 52-Week Highs, 27 New Lows
• 42.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.1%
• Vix 20.0 -2.4%
• Total Put/Call .84 -1.2%
• TRIN/Arms .84 +74.7%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 76.0 -1.25 basis points. 

• Asia Pacific Sovereign CDS Index 12.25 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 74.40 +.03%.

• FTSE 100 futures -.29%.

• S&P 500 futures -.46%.

• NASDAQ 100 futures -.42%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (FAST)/.62

• (BBBY)/1.41

Economic Releases

8:30 am EST

• The CPI MoM for March is estimated unch. versus a +.2% gain in February. 

• The CPI Ex Food and Energy MoM for March is estimated to rise +.2% versus a +.2% gain in February.

• Real Avg. Weekly Earnings YoY for March.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,375,300 barrels versus a -4,617,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,092,700 barrels versus a -1,116,000 barrel decline the prior week. Distillate inventories are estimated to rise by +101,100 barrels versus a +537,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.1% versus a +.7% gain prior.
  

2:00 pm EST

• The Monthly Budget Statement is estimated at -$186.0B versus -$215.2B in February. 

• March 31 FOMC Minutes.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China CPI report, UK Manufacturing Production report, $21B 10Y T-Note auction, Mark Zuckerberg's testimony to House Energy/Commerce Committee, weekly MBA Mortgage Applications report, (COST) April Sales report and the (ZUMZ) monthly sales report could also impact trading today.

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