Stocks Surging into Final Hour on Diminished Global Growth Fears, China Trade Deal Hopes, Oil Gain, Tech/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 14.7 -8.6%

• Euro/Yen Carry Return Index 129.91 +.11%

• Emerging Markets Currency Volatility(VXY) 8.16 -.85%

• S&P 500 Implied Correlation 41.84 -1.95%

• ISE Sentiment Index 81.0 +5.19%
  

• Total Put/Call .84 -13.4%

• NYSE Arms .72 -30.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.95 -4.45%
  

• America Energy Sector High-Yield CDS Index 537.0 +1.15%

• European Financial Sector CDS Index 73.81 -4.73%

• Italian/German 10Y Yld Spread 249.25 +5.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 69.21 -2.03%
  

• Emerging Market CDS Index 169.41 -3.26%
  

• iBoxx Offshore RMB China Corporate High Yield Index 159.35 +.10%

• 2-Year Swap Spread 12.75 +.25 basis point

• TED Spread 16.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -10.25 +.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.44 +.19%
• 3-Month T-Bill Yield 2.43% -1.0 basis point

• Yield Curve 16.5 -.25 basis point

• China Iron Ore Spot 81.27 USD/Metric Tonne +.42%

• Citi US Economic Surprise Index -31.90 +10.0 points

• Citi Eurozone Economic Surprise Index -47.0 +2.5 points

• Citi Emerging Markets Economic Surprise Index -26.50 -1.4 points

• 10-Year TIPS Spread 1.91 +1.0 basis point
• .8% chance of Fed rate hike at May 1st meeting, .7% chance at June 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +40 open in Japan 
• China A50 Futures: Indicating +148 open in China

• DAX Futures: Indicating +28 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value +1.0%

Sector Underperformers:

• 1) Gold & Silver -1.4% 2) Foods +.3% 3) Utilities +.4%

Stocks Falling on Unusual Volume: 

• BA, CRCM, EB, SPR and AU

Stocks With Unusual Put Option Activity:

• 1) RLGY 2) ZTS 3) BGS 4) SFIX 5) AET

Stocks With Most Negative News Mentions:

• 1) CRCM 2) BA 3) ARA 4) GBX 5) TRN

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.5%

Sector Outperformers:

• 1) Alt Energy +3.1% 2) Oil Service +2.8% 3) Computer Hardware +2.6%

Stocks Rising on Unusual Volume:

• MLNX, ELAN, PTE, NVEE, LXFR, PSCH, NOBL, WTRH, IGV, HMI, EEMA, ZYME, EEMV, BPTH, ESTC, BMA, STNE, THOR, UCTT, ZS, CFX, IYJ, BIP, AGYS, NSTG, BE, TRHC, CTMX, RPD, FEYE, NTNX, TTD, CSII, AMAG, WHD and REZI

Stocks With Unusual Call Option Activity:

• 1) SFIX 2) ARQL 3) WBT 4) BA 5) DKS

Stocks With Most Positive News Mentions:

• 1) YTRA 2) MCRB 3) NVDA 4) FEYE 5) NTNX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -.5% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 69.1% of Issues Advancing, 27.2% Declining
• 47 New 52-Week Highs, 16 New Lows
• 42.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.2%
• Vix 15.5 -3.7%
• Total Put/Call .97 unch.
• TRIN/Arms .85 -17.5%

Monday Watch

Today's Headlines

Bloomberg:

• China Pushes Back Against U.S. Trade Demands. 

• China Asks Local Airlines to Ground Boeing 737 Max, Caijing Says.

• BOE Asks Banks to Boost Liquid Assets Ahead of Brexit, FT Says.

• Stocks Face Mixed Start After 2019's Worst Week. Stocks in Asia looked set to start mixed Monday following the worst week for global equities since mid-December. Futures indicated Japan could eke out small gains when trading begins, while equities dropped at the open in Australia. Ten-year Treasury yields will begin the week near the lowest level in two months. Federal Reserve Chairman Jerome Powell reiterated he is in no hurry to change interest rates. The S&P 500 Index dipped on Friday and the dollar weakened after a report showed American hiring was the weakest in more than a year while wage gains were the fastest of the expansion. The pound edged lower as another key Brexit vote looms in parliament, on Prime Minister Theresa May’s revised deal. Australia’s S&P/ASX 200 Index dropped 0.2 percent. Futures on Japan’s Nikkei 225 rose 0.5 percent late Friday. Hang Seng Index futures dipped 0.4 percent. Futures on the S&P 500 Index were flat.

• China's Push-Back, World War II Debt Levels, Japan Inc.: Eco Day.  

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

• Kudlow Brushes Off Slowdown Calls, Says 3% Growth Can Prevail.

Wall Street Journal:

• Central Banks Play a Game of Risk Management.

• Riskier Stocks Are Paying Off.

• Trump to Request $8.6 Billion for Border Wall in 2020 Budget.

• U.S., China Near Currency Deal.

• Italy’s Migration Crackdown Is Stemming the Flow.

• Fed Chairman Powell Sees No Need to Change Rate Policy.

Fox News:

• Top House Dem says ex-Trump attorney Cohen likely to face DOJ perjury probe.

• Warren adds tech giant to list of major companies she’d like to rein in.

• Cheney rips Democrats for lack of action against Omar for 'anti-Semitic' comments.

CNBC:

• FDA chief Gottlieb’s departure might not actually be a good thing for vaping industry.

• Oil shale boom will keep rocking crude prices as US moves closer to becoming net exporter.

• ‘Brexit in peril’ as PM May faces heavy defeat.

• Nvidia(NVDA) nears deal to acquire Mellanox Technologies for more than $7 billion, source says.

Zero Hedge:   

• After Rotten Tomates Removes 93% Of Reviews, Captain Marvel Still Sucks.

• AOC Slams Capitalism As "Irredeemable" System.

• Ethiopian Airlines Flight Crashes 6 Minutes After Takeoff; 160 Killed, Including 8 Americans.

• Pound Slides On Report Cabinet Has Turned On May Ahead Of Critical Votes.

• Over 17 Million Younger Facebook Users Have Quit Amid Privacy Scandals.

• Eric Peters: "Everyone Is Wondering What Exactly Is Wrong With Europe".

• Dem Congresswoman Admits Cohen Will Probably Face Perjury Probe.

• Chinese Credit Growth Unexpectedly Crashes In February.

• Howard Schultz Spox Goes Ballistic After Daily Beast Pens 'Agenda-Driven' Hit Piece.

• Real Collusion: Leaked Documents Reveal DoJ Protected Steele After FBI Shunning.

• The Rise Of Totalitarian Technology.

• US Quarantines Over 2,200 Migrants Amid "Unprecedented" Disease Outbreaks.

• Lindsey Graham Doubles Down On FISA Abuse Probe As House Democrats Fire Up Post-Mueller Investigations.

• Algeria: The Iceberg That Could Sink Emmanuel Macron.

• How Much Longer Will The Middle-Class Politely Tolerate Its Own Destruction?

• Seven Things Saudi Women Still Can't Do, Despite Driving Ban Lift.

• Chaos Continues At Tesla As Company Now "Freezing" Store Closures And Layoffs.

• Bill Gates Triggers The Left With "Hate-Facts".

• Meanwhile In HFT Land: One Microwave Tower Is About To Be Blocked By Another Microwave Tower.

Business Insider:

• Joe Biden and Bernie Sanders top the list of favored Democrats for 2020 by a long shot, Iowa poll shows

• The largest healthcare company in the US is sounding the alarm on a new kind of emergency room that charges 20 times more than a regular doctor visit

• Chick-fil-A has the best reputation in fast food. Here's how 6 of the biggest companies stack up.

Telegraph:

• Escape from Brussels - it’s now or never.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 71.25 +1.5 basis points.

• China Sovereign CDS 52.0 +1.75 basis points.

• Bloomberg Emerging Markets Currency Index 67.29 -.02%.

• FTSE 100 futures -.43%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.16%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (ADT)/.12

• (COUP)/.00

• (PETQ)/.07

• (SFIX)/.05

Economic Releases 
8:30 am EST

• Retail Sales Advance MoM for Jan. are estimated to fall -.1% versus a -1.2% decline in Dec.

• Retail Sales Ex Autos MoM for Jan. is estimated to rise +.3% versus a -1.8% decline in Dec.

• Retail Sales Ex Autos and Gas for Jan. is estimated to rise +.6% versus a -1.4% decline in Dec.

10:00 am EST

• Business Inventories for Dec. is estimated to rise +.6% versus a -.1% decline in Nov.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Trade Balance report, 3Y T-Note auction, Cowen Healthcare Conference, Deutsche Bank Media/Internet/Telecom Conference and the (BLMN) analyst day could also impact trading today.

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