Friday Watch

Evening Headlines

Bloomberg: 

• ‘Trump Time’ Meets Reality as Trade Talks Test His Speed Demands.

• U.S., China Have Some Explaining to Do as March 1 Deadline Looms.

• Singapore's Economy Expands at a Weaker Pace Than Estimated.

• Asian Stocks Set for Decline; Treasuries Advance. Asian stocks looked set to end the week with declines following a dip in U.S. equities as concern about the economy resurfaced and as investors weighed the outlook for trade developments. Treasuries climbed. Futures pointed to a lower start for shares in Japan, Hong Kong and Australia. The S&P 500 Index fell after the worst drop for retail sales in nine years. That sent the 10-year Treasury yield down to 2.65 percent. Signs Congress would avert another government shutdown limited losses in U.S. shares until President Donald Trump said he intends to sign a government funding bill and at the same time declare a national emergency to get more money for a border wall. The S&P 500 Index fell 0.3 percent. Futures on Japan’s Nikkei 225 slid 0.7 percent in Singapore. Hang Seng futures dropped 0.5 percent. Futures on Australia’s S&P/ASX 200 Index fell 0.2 percent.    

• Five Things You Need to Know to Start Your Day.

• ‘Trump Time’ Meets Reality, EU v Populism, Retail Slump: Eco Day.  

• China Won't Come to the Rescue in Global Iron Ore Supply Crisis.

• Blankfein Says Move Against Amazon in NYC Was ‘Anti-Democratic’.

• Warren Buffett Doubles Down on Big Banks as Berkshire Trims Apple Stake.  

• Ford(F) and VW Discuss Autonomous Car Team-Up at a $4 Billion Valuation.

Wall St. Journal:

• Trump Will Sign Spending Package, Declare Emergency.

• This Common Flu Virus Is a Growing Threat.

• Amazon Cancels HQ2 Plans in New York City.

• Barr Confirmed as Attorney General.

• Will Republicans Start Winning on Health Care?

• Icahn to Push Caesars to Consider Selling Itself.

• Fed Officials Near Plan to Finish Portfolio Wind-Down.

MarketWatch.com:

• Should stock-market investors freak out over an earnings recession? These charts say no.

Fox News:

• Governor slams Ocasio-Cortez, other politicians, as Amazon ditches New York.

• GOP call for re-do vote on high-speed rail after Newsom's 'bait-and-switch'.

CNBC:

• Pelosi warns GOP that a Democratic president could declare gun violence a national emergency.

• Stocks making the biggest moves after hours: Nvidia, Truecar, CBS and more.

Zero Hedge:

• Americans Continue To Flee To Low-Tax States.  

• Property Prices Are Plummeting In Super-Wealthy Dubai.

• 'Empire' Star Faked Chicago "MAGA Country" Attack With Two Extras: Report.

• Socialized Healthcare Reality Exposed: 30,000 Dead Due To Record Long Hospital Waiting Times.  

• NYC Councilman Says Union Dispute Killed Amazon Deal, Not Subsidies.

• "Their Careers Are Over:" Real Estate Brokers Furious At Politicians For Shock Amazon Withdrawal.

• Trump Will Declare State Of National Emergency To Fund Border Wall; Pelosi Threatens Legal Challenge.

• Stocks Stumble After Retail Rout, Coke Collapse, Bezos Bombshell, & Trade Turmoil.

Business Insider:

• Nvidia(NVDA) surges after beating on profits and sales expectations.

Telegraph:

• Comment: Europe will have to offer May a Brexit concession or risk a diplomatic and economic disaster.

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 76.0 +.5 basis point. 

• China Sovereign CDS 54.0 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 67.86 -.04%.

• FTSE 100 futures unch.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.14%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AXL)/.42

• (DE)/1.77

• (MCO)/1.68

• (NWL)/.65

• (ZEUS)/.17

• (PEP)/1.50

After the Close:

• None of note

Economic Releases
8:30 am EST

• Empire Manufacturing for Feb. is estimated to rise to 7.0 versus 3.9 in Jan.

• The Import Price Index MoM for Jan. is estimated to fall -.2% versus a -1.0% decline in Dec.

• The Import Price Index Ex Petro MoM for Jan. is estimated to fall -.1% versus a +.3% gain in Dec.

• The Export Prices Index MoM for Jan. is estimated to fall -.1% versus a -.6% decline in Dec.

9:15 am EST

• Industrial Production MoM for Jan. is estimated to rise +.1% versus a +.3% gain in Dec.

• Capacity Utilization for Jan. is estimated at 78.7% versus 78.7% in Dec.

• Manufacturing Production for Jan. is estimated unch. versus a +1.1% gain in Dec.
  

10:00 am EST

• 4Q Mortgage Delinquencies/Foreclosures.

• Preliminary Univ. of Mich. Consumer Confidence for Feb. is estimated to rise to 93.5 versus 91.2 in Jan.
  

4:00 pm EST

• Net Long-Term TIC Flows for Dec.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China CPI report, Eurozone Trade Balance report, Govt funding deadline for agencies and the (HAS) investor update could also impact trading today.

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

Stocks Slightly Lower into Final Hour on China Trde Deal Concerns, Global Growth Worries, Yen Strength, Gaming/Financial Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 15.76 +.7%

• Euro/Yen Carry Return Index 129.80 -.08%

• Emerging Markets Currency Volatility(VXY) 8.91 unch.

• S&P 500 Implied Correlation 42.01 -.02%

• ISE Sentiment Index 93.0 +8.14%
  

• Total Put/Call .89 -11.0%

• NYSE Arms 1.03 -7.21%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.34 +.17%
  

• America Energy Sector High-Yield CDS Index 559.0 +.45%

• European Financial Sector CDS Index 89.0 +.80%

• Italian/German 10Y Yld Spread 270.0 +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 75.37 -.76%
  

• Emerging Market CDS Index 176.90 -.31%
  

• iBoxx Offshore RMB China Corporate High Yield Index 156.98 +.04%

• 2-Year Swap Spread 14.0 +.75 basis point

• TED Spread 28.5 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -6.75 +2.0 basis points.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.90 +.09%
• 3-Month T-Bill Yield 2.42% unch.

• Yield Curve 16.25 -1.0 basis point

• China Iron Ore Spot 84.80 USD/Metric Tonne unch.

• Citi US Economic Surprise Index 15.70 +.3 point

• Citi Eurozone Economic Surprise Index -80.60 -1.6 points

• Citi Emerging Markets Economic Surprise Index -12.5 -.8 point

• 10-Year TIPS Spread 1.86 unch.
• 0.0% chance of Fed rate hike at May 1st meeting, 3.8% chance at June 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -90 open in Japan 
• China A50 Futures: Indicating +5 open in China

• DAX Futures: Indicating +32 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value unch.

Sector Underperformers:

• 1) Gaming -2.4% 2) Insurance -.9% 3) Banks -.5%

Stocks Falling on Unusual Volume: 

• SVMK, SWIR, SIX, GOOS, FOSL, CTL, NUS, IFF, CRY, JACK, KO, IIPR, NTAP, AIG and MGM

Stocks With Unusual Put Option Activity:

• 1) AET 2) MDCO 3) CVNA 4) IRM 5) UA

Stocks With Most Negative News Mentions:

• 1) GSM 2) NUS 3) SVMK 4) CTL 5) MGM

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.6%

Sector Outperformers:

• 1) Alt Energy +1.7% 2) Networking +1.2% 3) Drugs +1.0%

Stocks Rising on Unusual Volume:

• CWEN, SNBR, SIC, CYBR, MYOK, CTY, YETI, LSCC, CTBB, NP, DIOD, ZBRA, AVRO, TCX, CTDD, HEAR, TPX, BE, NGVT, AVLR, GTLS, GNRC, BLMN, OMER, EPAM, VNDA, VMC, IQV, AAN, ZUO, ARCH and TCO

Stocks With Unusual Call Option Activity:

• 1) CBS 2) ZTS 3) MRO 4) VMC 5) BBBY

Stocks With Most Positive News Mentions:

• 1) ZTS 2) BLMN 3) CYBR 4) NSIT 5) CSCO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +10.0% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 46.0% of Issues Advancing, 51.2% Declining
• 61 New 52-Week Highs, 4 New Lows
• 44.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.5%
• Vix 16.4 +4.5%
• Total Put/Call .95 -5.0%
• TRIN/Arms 1.5 +35.1%