Tuesday, April 17, 2018

Stocks Surging into Final Hour on Diminishing Geopolitcal/Trade War Fears, Earnings Optimism, Technical Buying, Tech/Biotech Sector Strength

Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 15.0 -9.2%
  • Euro/Yen Carry Return Index 137.74 -.25%
  • Emerging Markets Currency Volatility(VXY) 8.07 -1.1%
  • S&P 500 Implied Correlation 39.95 -4.69%
  • ISE Sentiment Index 104.0 -3.0%
  • Total Put/Call 1.01 +10.9%
  • NYSE Arms .78 -19.8%
Credit Investor Angst:
  • North American Investment Grade CDS Index 58.70 -1.6%
  • America Energy Sector High-Yield CDS Index 417.0 -1.64%
  • European Financial Sector CDS Index 55.49 -1.8%
  • Italian/German 10Y Yld Spread 125.25 -2.5 basis points
  • Asia Pacific Sovereign Debt CDS Index 12.11 -3.23%
  • Emerging Market CDS Index 137.81 -.95%
  • iBoxx Offshore RMB China Corporate High Yield Index 149.40 +.05%
  • 2-Year Swap Spread 29.0 -1.75 basis points
  • TED Spread 58.25 -1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.75 +2.75 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 74.73 +.01%
  • 3-Month T-Bill Yield 1.78% +4.0 basis points
  • Yield Curve 42.5 -3.0 basis points
  • China Iron Ore Spot 65.15 USD/Metric Tonne +1.18%
  • Citi US Economic Surprise Index 29.40 +7.6 points
  • Citi Eurozone Economic Surprise Index -91.80 -4.0 points
  • Citi Emerging Markets Economic Surprise Index 5.9 -1.6 points
  • 10-Year TIPS Spread 2.14 +1.0 basis point
  • 90.0% chance of Fed rate hike at June 13 meeting, 90.7% chance at August 1 meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +112 open in Japan 
  • China A50 Futures: Indicating +177 open in China
  • DAX Futures: Indicating +11 open in Germany
Portfolio: 
  • Higher: On gains in my industrial/tech/retail/medical/biotech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:
  • Small-Cap Value +.5%
Sector Underperformers:
  • 1) Banks -.6% 2) Airlines -.6% 3) Tobacco -.1%
Stocks Falling on Unusual Volume: 
  • LADR, CMA, NUVA and REVG
Stocks With Unusual Put Option Activity:
  • 1) IMGN 2) AVXS 3) FOXA 4) DVMT 5) PEP
Stocks With Most Negative News Mentions:
  • 1) NLST 2) CHK 3) BMY 4) RRC 5) GWR
Charts:

Bull Radar

Style Outperformer:
  • Large-Cap Growth +1.5%
Sector Outperformers:
  • 1) Internet +3.0% 2) Steel +2.8% 3) Networking +2.2%
Stocks Rising on Unusual Volume:
  • ANTX, IIN, GWPH, CBI, CLXT, CVNA, CISN, CIFS, IHG, NVCR, ROKU, PUMP, IGV, NFLX, OTEX, FMS, GLOB, GLPG, CE, QIWI, BLK, ICFI, PINC, WDAY, CYOU, SAIL and QLYS
Stocks With Unusual Call Option Activity:
  • 1) MMP 2) CAR 3) URI 4) ADP 5) CIEN
Stocks With Most Positive News Mentions:
  • 1) NFLX 2) TWTR 3) ROKU 4) ARQL 5) UNH
Charts:

Morning Market Internals

NYSE Composite Index:

Monday, April 16, 2018

Tuesday Watch

Evening Headlines
Bloomberg:
  • Asia Stocks Rise as Earnings Eyed; Dollar Falls: Markets Wrap. Equity markets in Japan and Australia eked out feeble gains in a muted start, while Hong Kong stocks pointed higher. Futures on the S&P 500 Index climbed. The S&P 500 Index gained to the highest in almost a month and erased its loss for the year as investors turned their focus to the earnings season after there was no immediate reprisal to the U.S.-led missile strike in Syria and trade concerns took a back seat. The dollar traded at the lowest in two months as U.S. President Donald Trump accused Russia and China of devaluing their currencies, contradicting an assessment from the Treasury Department. Treasury yields were steady and West Texas crude futures traded below $67 a barrel. Japan’s Topix index fluctuated as of 9:18 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.5 percent. The Kospi index rose 0.3 percent. Futures on Hong Kong’s Hang Seng Index rose 0.6 percent. S&P 500 futures rose 0.2 percent.
Night Trading 
  • Asian equity indices are -.5% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 74.5 -.25 basis point. 
  • Asia Pacific Sovereign CDS Index 12.5 unch.
  • Bloomberg Emerging Markets Currency Index 74.74 +.02%.
  • FTSE 100 futures -.10%.
  • S&P 500 futures +.04%.
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (CMA)/1.54
  • (GS)/5.57
  • (JNJ)/2.00
  • (NTRS)/1.42
  • (UNH)/2.91
  • (PGR)/1.17
  • (OMC)/1.05
  • (BMI)/.36
  • (CSX).66
  • (IBM)/2.42
  • (IBKR)/.59
  • (ISRG)/2.06
  • (LRCX)/4.37
  • (UAL)/.41
Economic Releases
8:30 am EST
  • Housing Starts for March is estimated to rise to 1267K versus 1236K in February.
  • Building Permits for March is estimated to rise to 1321K versus 1298K in February.
9:15 am EST
  • Industrial Production MoM for March is estimated to rise +.4% versus a +1.1% gain in February.
  • Manufacturing Production for March is estimated to rise +.1% versus a +1.2% gain in February. 
  • Capacity Utilization for March is estimated to fall to 77.9% versus 78.1% in February.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Williams speaking, Fed's Quarles speaking, Fed's Evans speaking, China GDP report, Japan Capacity Utilization report, Japan Trade Balance report, weekly US retail sales reports, German ZEW Index and the (FDS) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by energy 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 Surging into Final Hour on Diminished Geopolitical Tensions, Less Trade War Talk, Earnings Optimism, Road & Rail/Healthcare 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) 16.9 -3.2%
  • Euro/Yen Carry Return Index 138.04 +.14%
  • Emerging Markets Currency Volatility(VXY) 8.17 -1.68%
  • S&P 500 Implied Correlation 43.47 +2.0%
  • ISE Sentiment Index 82.0 unch.
  • Total Put/Call .90 -8.16%
  • NYSE Arms 1.0 -6.73%
Credit Investor Angst:
  • North American Investment Grade CDS Index 59.46 -3.61%
  • America Energy Sector High-Yield CDS Index 425.0 -1.36%
  • European Financial Sector CDS Index 56.51 -1.6%
  • Italian/German 10Y Yld Spread 127.75 -.75 basis point
  • Asia Pacific Sovereign Debt CDS Index 12.52 +.68%
  • Emerging Market CDS Index 138.72 -.96%
  • iBoxx Offshore RMB China Corporate High Yield Index 149.32 +.07%
  • 2-Year Swap Spread 30.75 -1.0 basis point
  • TED Spread 59.0 -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -7.5 +1.25 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 74.72 +.20%
  • 3-Month T-Bill Yield 1.74% -1.0 basis point
  • Yield Curve 45.5 -1.0 basis point
  • China Iron Ore Spot 63.80 USD/Metric Tonne +.20%
  • Citi US Economic Surprise Index 21.80 -3.4 points
  • Citi Eurozone Economic Surprise Index -87.80 +1.1 points
  • Citi Emerging Markets Economic Surprise Index 7.5 -10.1 points
  • 10-Year TIPS Spread 2.13 -1.0 basis point
  • 88.6% chance of Fed rate hike at June 13 meeting, 89.3% chance at August 1 meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -20 open in Japan 
  • China A50 Futures: Indicating +4 open in China
  • DAX Futures: Indicating +24 open in Germany
Portfolio: 
  • Higher: On gains in my industrial/tech/retail medical sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long