Morning Market Internals

NYSE Composite Index:

• Volume Running -7.8% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 62.1% of Issues Advancing, 34.0% Declining
• 14 New 52-Week Highs, 10 New Lows
• 27.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.3%
• Vix 19.67 +.77%
• Total Put/Call .96 -18.0%
• TRIN/Arms 1.12 +.9%

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 86.50 -.5 basis point. 

• China Sovereign CDS 60.50 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 67.97 +.05%.

• FTSE 100 futures -.74%.

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.32%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (AAL)/1.01

• (BMY)/.85

• (FCX)/.19

• (JBLU)/.43

• (MKC)/1.70

• (NVR)/49.62

• (LUV)/1.08

• (STM)/.41

• (TXT)/.98

• (UNP)/2.06

After the Close:

• (ALK)/.71

• (ETFC)/1.04

• (FII)/.59

• (INTC)/1.23

• (ISRG)/3.07

• (MSTR)/1.01

• (NSC)/2.30

• (SBUX)/.65

• (WDC)/1.50

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 218K versus 213K the prior week.

• Continuing Claims are estimated to fall to 1730K versus 1737K prior.
  

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for January is estimated to fall to 53.5 versus 53.8 in Dec.

10:00 am EST

• The Leading Index for Dec. is estimated to fall -.1% versus a +.2% gain in Nov.

11:00 am EST

• The Kansas City Fed Manufacturing Index for Jan. is estimated at 3.0 versus a reading of 3.0 in Dec. 

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -158,090 barrels versus a -2,683,000 barrel decline the prior week. Gasoline inventories are estimated to rise by +3,128,200 barrels versus a +7,503,000 barrel gain the prior week. Distillate inventories are estimated to rise by +777,400 barrels versus a +2,967,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.86% versus a -1.5% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The ECB rate decision/press conference, Japan CPI report, Australia Unemployment Rate report, Eurozone Services PMI report, weekly Bloomberg Consumer Comfort Index and the EIA natural gas inventory report could also impact trading today.

BOTTOM LINE:  Asian indices are slightly higher, boosted by healthcare and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Slightly Higher into Final Hour on Earnings Optimism, Less European/Emerging Markets/US High-Yield Debt Angst, Technical Buying, Tech/Restaurant Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 20.33 -2.16%

• Euro/Yen Carry Return Index 129.66 +.41%

• Emerging Markets Currency Volatility(VXY) 9.01 -.99%

• S&P 500 Implied Correlation 47.89 -1.3%

• ISE Sentiment Index 52.0 -14.74%
  

• Total Put/Call 1.19 +30.8%

• NYSE Arms 1.06 -41.99%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.82 -.38%
  

• America Energy Sector High-Yield CDS Index 725.0 +1.95%

• European Financial Sector CDS Index 92.90 -3.04%

• Italian/German 10Y Yld Spread 252.75 +2.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 86.77 +.79%
  

• Emerging Market CDS Index 179.55 -2.73%
  

• iBoxx Offshore RMB China Corporate High Yield Index 154.78 +.24%

• 2-Year Swap Spread 15.25 unch.

• TED Spread 35.75 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -1.25 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.93 +.38%
• 3-Month T-Bill Yield 2.40% unch.

• Yield Curve 16.5 +1.0 basis point

• China Iron Ore Spot 74.45 USD/Metric Tonne +.81%

• Citi US Economic Surprise Index -6.10 -.3 point

• Citi Eurozone Economic Surprise Index -70.0 +1.0 point

• Citi Emerging Markets Economic Surprise Index -11.3 -.7 point

• 10-Year TIPS Spread 1.79 unch.
• 2.6% chance of Fed rate hike at March 20th meeting, 6.6% chance at May 1st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -73 open in Japan 
• China A50 Futures: Indicating +19 open in China

• DAX Futures: Indicating -26 open in Germany

Portfolio: 

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

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

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.8%

Sector Underperformers:

• 1) Oil Service -1.9% 2) Road & Rail -1.5% 3) Biotech -1.2%

Stocks Falling on Unusual Volume: 

• DOX, PTCT, CWST, FBK, WTFC, TSE, ROL, URGN, IIIN, RES, EDIT, COF, RY, TEL, SFNC, DISH, GPN, PCRX, TSLA, KMB, ENTA, TBK, NTRS, BIB and CRSP

Stocks With Unusual Put Option Activity:

• 1) SYMC 2) IBM 3) VWO 4) FSLR 5) XLNX

Stocks With Most Negative News Mentions:

• 1) QCOM 2) DOX 3) TSLA 4) QUOT 5)PFE

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.4%

Sector Outperformers:

• 1) Computer Services +2.8% 2) Papers +1.3% 3) Steel +.8%

Stocks Rising on Unusual Volume:

• QSR, LRN, SYF, CNMD, LOGI, LABL, EHTH, IBM, WAT, PZZA, PETS, ARNC, UTX, PG, CHU, ZION and ATI

Stocks With Unusual Call Option Activity:

• 1) TELL 2) APC 3) PAA 4) IBM 5) PG

Stocks With Most Positive News Mentions:

• 1) PG 2) CMCSA 3) UTX 4) WAT 5) IBM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.2% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 51.7% of Issues Advancing, 44.6% Declining
• 13 New 52-Week Highs, 13 New Lows
• 25.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.2%
• Vix 20.3 -2.4%
• Total Put/Call 1.25 +37.4%
• TRIN/Arms 1.0 -44.8%