Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 67.25 -.5 basis point. 

• China Sovereign CDS 47.0 -5.0 basis points.

• Bloomberg Emerging Markets Currency Index 67.59 -.01%.

• FTSE 100 futures +.44%.

• S&P 500 futures -.07%.

• NASDAQ 100 futures -.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (VRA)/.24

After the Close:

• (SMTC)/.53
• (WSM)/1.97
• (CLDR)/-.07

Economic Releases
8:30 am EST

• PPI Final Demand MoM for Feb. is estimated to rise +.2% versus a -.1% decline in Jan.
• PPI Ex Food and Energy MoM for Feb. is estimated to rise +.2% versus a +.3% gain in Jan.
• Durable  Goods Orders for Jan. is estimated to fall -.4% versus a +1.2% gain in Dec.
• Durables Ex Transports for Jan. is estimated to rise +.1% versus a +.1% gain in Dec.
• Cap Goods Orders Non-Defense Ex-Air for Jan. is estimated to rise +.2% versus a -1.0% decline in Dec.

10:00 am EST

• Construction Spending MoM for Jan. is estimated to rise +.5% versus a -.6% decline in Dec.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Industrial Production report, $16B 30Y T-Note auction, weekly MBA Mortgage Applications report, weekly EIA energy inventory data, (AXP) investor day, (CY) analyst day and the (EFX) investor meeting could also impact trading today.

BOTTOM LINE:  Asian indices are slightly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.

Stocks Higher into Afternoon on Brexit Hopes, Lower Long-Term Rates, Less European/Emerging Markets/US High-Yield Debt Angst, Biotech/Commodity 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) 13.7 -4.7%

• Euro/Yen Carry Return Index 130.62 +.5%

• Emerging Markets Currency Volatility(VXY) 8.09 -.61%

• S&P 500 Implied Correlation 39.73 -4.08%

• ISE Sentiment Index 91.0 +11.0%
  

• Total Put/Call .98 +21.0%

• NYSE Arms 1.10 +61.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.37 -2.13%
  

• America Energy Sector High-Yield CDS Index 528.0 -1.55%

• European Financial Sector CDS Index 72.72 -1.48%

• Italian/German 10Y Yld Spread 248.5 -.75 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 67.73 -2.41%
  

• Emerging Market CDS Index 169.22 -.20%
  

• iBoxx Offshore RMB China Corporate High Yield Index 159.54 +.12%

• 2-Year Swap Spread 12.0 -.75 basis point

• TED Spread 17.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -10.5 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.60 +.21%

• 3-Month T-Bill Yield 2.43% unch.

• Yield Curve 15.25 -1.25 basis points

• China Iron Ore Spot 83.0 USD/Metric Tonne +2.67%

• Citi US Economic Surprise Index -39.40 -7.5 points

• Citi Eurozone Economic Surprise Index -42.10 +4.9 points

• Citi Emerging Markets Economic Surprise Index -26.0 +.5 point

• 10-Year TIPS Spread 1.90 -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 -188 open in Japan 

• China A50 Futures: Indicating +92 open in China

• DAX Futures: Indicating +4 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +.2%

Sector Underperformers:

• 1) Industrials -.8% 2) Gaming -.7% 3) Foods -.4%

Stocks Falling on Unusual Volume: 

• HTGC, BA, DKS, NUVA, FFIV, NSTG, TAL, SPTN and TCMD

Stocks With Unusual Put Option Activity:

• 1) DISCA 2) QEP 3) AET 4) KKR 5) GT

Stocks With Most Negative News Mentions:

• 1) ADT 2) BA 3) HPE 4) BRS 5) UNFI

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.5%

Sector Outperformers:

• 1) Oil Service +2.7% 2) Shipping +1.5% 3) Steel +1.3%

Stocks Rising on Unusual Volume:

• SFIX, MOMO, QTNA, ESL, IFRX, OXFD, BPTH, INSW, NVEE, IGV, ELAN, MELI, MGTX, UPLD, CASY HMI, NTNX, PYX, KALV, EOG, HTHT, NEM, CJ, PHI, IIPR and VRA

Stocks With Unusual Call Option Activity:

• 1) IEF 2) NOG 3) SFIX 4) XLK 5) XBI

Stocks With Most Positive News Mentions:

• 1) SFIX 2) MOMO 3) KEYW 4) AKBA 5) T

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -11.4% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 62.4% of Issues Advancing, 34.6% Declining
• 113 New 52-Week Highs, 11 New Lows
• 46.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.7%
• Vix 13.8 -3.5%
• Total Put/Call .84 +3.7%
• TRIN/Arms .87 +27.9%

Tuesday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 67.75 -3.5 basis points. 

• China Sovereign CDS 52.0 -5.0 basis points.

• Bloomberg Emerging Markets Currency Index 67.49 +.05%.

• FTSE 100 futures +.22%.

• S&P 500 futures +.22%.

• NASDAQ 100 futures +.34%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (DKS)/1.06
• (IPI)/.04

After the Close:

• (APEI)/.52
• (COHU)/.19
• (SNCR)/-.03
• (ZAGG)/.50

Economic Releases
6:00 am EST

• The NFIB Small Business Optimism Index for Feb. is estimated to rise to 102.5 versus 101.2 in Jan.

8:30 am EST

• The CPI MoM for February is estimated to rise +.2% versus unch. in Jan.
• The CPI Ex Food and Energy MoM for February is estimated to rise +.2% versus a +.2% gain in Jan.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan CPI report, UK Brexit vote, UK industrial production report, $24B 10Y T-Note auction, weekly US retail sales reports, BofA Merrill Consumer/Retail Tech Conference, Susquehanna Financial Group Tech Conference, RBC Financial Institutions Conference, Barclays Healthcare Conference, (COUP) investor day, (EFX) investor meeting, (LGND) analyst day and the (YUMC) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted 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 100% net long heading into the day.