Stocks Lower into Final Hour on Global Growth Worries, Oil Decline, Technical Selling, Energy/Retail Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.2 +29.2%

• Euro/Yen Carry Return Index 129.73 -.04%

• Emerging Markets Currency Volatility(VXY) 8.24 +.24%

• S&P 500 Implied Correlation 43.92 +2.38%

• ISE Sentiment Index 81.0 -14.7%
  

• Total Put/Call .96 -13.5%

• NYSE Arms 1.38 +17.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.59 +1.32%
  

• America Energy Sector High-Yield CDS Index 533.0 +2.78%

• European Financial Sector CDS Index 77.48 +2.38%

• Italian/German 10Y Yld Spread 243.5 +3.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 70.64 +4.05%
  

• Emerging Market CDS Index 175.37 -1.56%
  

• iBoxx Offshore RMB China Corporate High Yield Index 159.19 +.01%

• 2-Year Swap Spread 12.5 +.25 basis point

• TED Spread 15.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -11.0 -1.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.29 +.01%
• 3-Month T-Bill Yield 2.44% -1.0 basis point

• Yield Curve 16.75 unch.

• China Iron Ore Spot 83.0 USD/Metric Tonne +.86%

• Citi US Economic Surprise Index -42.10 -9.2 points

• Citi Eurozone Economic Surprise Index -49.5 -1.1 points

• Citi Emerging Markets Economic Surprise Index -25.10 -9.9 points

• 10-Year TIPS Spread 1.90 -1.0 basis point
• 0.0% chance of Fed rate hike at May 1st meeting, 0.0% chance at June 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -190 open in Japan 
• China A50 Futures: Indicating -113 open in China

• DAX Futures: Indicating +12 open in Germany

Portfolio:

• Slightly Lower: On losses in my retail/biotech/tech/medical/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.7%

Sector Underperformers:

• 1) Oil Service -3.1% 2) Energy -2.3% 3) Shipping -1.9%

Stocks Falling on Unusual Volume: 

• NVEE, FIZZ, AMAG, OEC, LOCO, ARA, OKTA, HUYA, NAV, AOBC, SFIX, CBT, GME, ZAGG and EB

Stocks With Unusual Put Option Activity:

• 1) BIG 2) AET 3) XOP 4) XHS 5) SCHW

Stocks With Most Negative News Mentions:

• 1) EB 2) AMAG 3) FIZZ 4) GME 5) TAP

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth -.3%

Sector Outperformers:

• 1) Gold & Silver +1.9% 2) Homebuilding +.3% 3) Banks unch.

Stocks Rising on Unusual Volume:

• BIG, UPLD, BERY, FTAI, DXPE, JYNT, RST, FNKO, COST, RARX, FLY, NSTG, WBC, MTN, BMA, GGAL, LIND, YY, NVTA, WAGE, OZM, CVS, WHD, NCNA and CNDT

Stocks With Unusual Call Option Activity:

• 1) DNR 2) COST 3) SYMC 4) WBA 5) NAV

Stocks With Most Positive News Mentions:

• 1) UPLD 2) BIG 3) ERII 4) WAGE 5) NTES

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +8.5% Above 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 27.4% of Issues Advancing, 69.9% Declining
• 22 New 52-Week Highs, 38 New Lows
• 43.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.71%
• Vix 17.8 +7.1%
• Total Put/Call .80 -27.9%
• TRIN/Arms 1.36 +26.9%

Friday Watch

Evening Headlines

Bloomberg:

• Japan’s Economy Rebounded More Than First Thought in 4th Quarter.

• Some ECB Officials Doubt 2019 Outlook Even After Cut.   

• The Fed and ECB Confront a New Normal That Looks a Lot Like Japan's.

• Stock Slide Extends to Asia Amid Growth Worries. Stocks in Asia tracked declines in the U.S. after a European Central Bank cut to economic forecasts reignited concern on global growth and sent global bond yields lower. The euro fell to the lowest since 2017. Shares in Sydney and Tokyo retreated after the S&P 500 Index sank for a fourth day, with Amazon, Microsoft, Apple and Facebook the biggest drags. The gauge closed just below its closely watched 200-day moving average that has provided support in the past. Australian bonds tracked gains in Treasuries and bunds, while the dollar steadied after gaining for a seventh day. Japan’s Topix index fell 0.8 percent as of 9:03 a.m. in Tokyo. South Korea’s Kospi index lost 0.5 percent. Australia’s S&P/ASX 200 Index dropped 0.5 percent. The S&P 500 Index fell 0.8 percent. Futures dipped 0.1 percent. Hang Seng futures earlier lost 0.7 percent.   

• Central Banks' New Normal, ECB Debate, China New Plans: Eco Day.  

• Jobs-Day Guide: Wages Expected to Warm Up as Payroll Gains Cool.

• Hedge Funds Gain in February for Strongest Start Since 2012.  

• Costco(COST) Rises as Margins Improve in Competitive Wholesale Market.

Wall St. Journal:

• Slow Growth Likely Keeps Fed on Hold, Spurs ECB Action.

• Zuckerberg Promises Privacy, but Not Privacy From Facebook(FB).

• The Democratic Crackup.

• Administration Weighs Mandating Disclosure of Health-Care Rates.

MarketWatch.com:  

• Dow is on the verge of a bullish golden cross, but stock-market analysts aren’t exactly cheering.

• Beware the ‘Japanification’ of Europe, warn ING economists.

CNBC:

• February's jobs report should show whether there's anything to really fear about economy.

• The Fed doesn't have to worry about high inflation anymore, and that's a problem.

• U.S. stocks are sinking on worries about Europe’s growth—here are 5 experts’ reactions.

• Stocks making the biggest moves after hours: Costco, Eventbrite and more.

Zero Hedge:

• House Passes Anti-Bigotry Resolution After Anti-Semitism Push Splits Party.

• Martin Shkreli Is Running His Company From Prison Using A Contraband Cellphone.

• Paul Manafort Sentenced To 47 Months In Prison.

• Leaked Audio: Google Wants To 'Steer' Conservative Movement Away From Nationalism.

• Minimum-Wage Law, Rising Rents May Force SF's Last Fortune-Cookie Factory To Close.

• Nevada Bill Will Allow Police To Search Everyone's Smartphone.

• Trudeau Refuses To Apologize Over Corruption Scandal.

• Consumer Credit Storms Above $4 Trillion, As Credit Card Debt Hits Record High.

• Why Kyle Bass Is Doubling Down On "Big Yuan Short".

• Facebook(FB) To Censor Anti-Vax Ads, Groups, And Pages That "Spread Misinformation".

• Dollar Jumps, Stocks & Bond Yields Dump As Not-Dovish-Enough Draghi Disappoints.

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 69.75 +2.25 basis points. 

• China Sovereign CDS 50.25 +2.75 basis points.

• Bloomberg Emerging Markets Currency Index 67.29 +.01%.

• FTSE 100 futures -.22%.

• S&P 500 futures -.18%.

• NASDAQ 100 futures -.16%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (NAV)/.13

• (MTN)/4.80

After the Close:

• None of note

Economic Releases
8:30 am EST

• Housing Starts for Jan. are estimated to rise to 1195K versus 1078K in Dec. 

• Building Permits for Jan. is estimated to fall to 1287K versus 1326K in Dec. 

• The Change in Non-Farm Payrolls for Feb. is estimated at 180K versus 304K in Jan.

• The Unemployment Rate for Feb. is estimated to fall to 3.9% versus 4.0% in Jan.

• Average Hourly Earnings MoM for Feb. is estimated to rise +.3% versus a +.1% gain in Jan.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Daly speaking, Eurozone Factory Orders report, China Trade Balance report, (ON) analyst day and the (PSMT) monthly sales release could also impact trading today.

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