Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 71.5 -1.0 basis points. 

• China Sovereign CDS 45.5 +.5 basis point.
  

• Bloomberg Emerging Markets Currency Index 67.06 +.01%.

• FTSE 100 futures +.30%.

• S&P 500 futures +.20%.

• NASDAQ 100 futures +.24%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (BB)/.06
• (KMX)/.03

After the Close:

• None of note

Economic Releases
8:30 am EST

• Personal Income for Feb. is estimated to rise +.3% versus a -.1% decline in Jan.
• Personal Spending for Jan. is estimated to rise +.3% versus a -.5% decline in Jan.
• The PCE Core MoM for Feb. is estimated to rise +.2% versus a +.2% gain in Jan.
  

9:45 am EST

• The MNI Chicago PMI for March is estimated to fall to 61.0 versus 64.7 in Feb.

10:00 am EST

• New Home Sales for Feb. are estimated to rises to 620K versus 607K in Jan.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Quarles speaking, Eurozone CPI report, Brexit Deadline and the Amer. Assoc.  for Cancer Research annual meeting could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Modestly Higher into Afternoon on Diminished Global Growth Fears, Technical Buying, Short-Covering, Transport/Gaming Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 15.0 -1.2%

• Euro/Yen Carry Return Index 129.02 -.1%

• Emerging Markets Currency Volatility(VXY) 9.52 +3.25%

• S&P 500 Implied Correlation 40.37 -1.8%

• ISE Sentiment Index 63.0 -28.4%
  

• Total Put/Call .89 -13.6%

• NYSE Arms 1.01 -40.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.83 -2.1%
  

• America Energy Sector High-Yield CDS Index 529.0 +.38%

• European Financial Sector CDS Index 83.96 +.65%

• Italian/German 10Y Yld Spread 255.5 +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 71.84 -.25%
  

• Emerging Market CDS Index 183.70 -2.14%
  

• iBoxx Offshore RMB China Corporate High Yield Index 160.90 +.03%

• 2-Year Swap Spread 11.25 +.5 basis point

• TED Spread 18.0 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.5 -2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.09 -.18%
• 3-Month T-Bill Yield 2.42% unch.

• Yield Curve 15.25 -1.25 basis points

• China Iron Ore Spot 82.25 USD/Metric Tonne -.53%

• Citi US Economic Surprise Index -40.0 +.3 point

• Citi Eurozone Economic Surprise Index -58.70 -4.3 points

• Citi Emerging Markets Economic Surprise Index -17.20 +.6 point

• 10-Year TIPS Spread 1.83 -1.0 basis point
• 28.2% chance of Fed rate cut at June 19th meeting, 36.7% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +172 open in Japan 
• China A50 Futures: Indicating +47 open in China

• DAX Futures: Indicating +40 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.3%

Sector Underperformers:

• 1) Gold & Silver-3.0% 2) Homebuilding -1.5% 3) Utilities -1.2%

Stocks Falling on Unusual Volume: 

• WBC, NLSN, RBZ, TIGR, YETI, KL, SCVL, WIFI, CIM and NSTG

Stocks With Unusual Put Option Activity:

• 1) AET 2) NLSN 3) CNC 4) PZZA 5) RH

Stocks With Most Negative News Mentions:

• 1) ARA 2) OSMT 3) PRTO 4) EGY 5) NLSN

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.4%

Sector Outperformers:

• 1) Tobacco +1.4% 2) Gaming +1.2% 3) Alt Energy +.9%

Stocks Rising on Unusual Volume:

• QTNA, TCDA, LULU, VRNT, PVH, FIVE, MOV, VFF, AUTL, GTHX, WCG, AMRN, ACN, IYT, TREX, ACIA, ALKS, UBNT, OLLI, ABMD, TTD, TDOC, CNST, FTDR, SNX, FIVE, CCXI and TREX

Stocks With Unusual Call Option Activity:

• 1) KNX 2) ARCC 3) TMUS 4) FIVE 5) XRT

Stocks With Most Positive News Mentions:

• 1) PVH 2) LULU 3) MOV 4) VRNT 5) FIVE

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -13.6% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 61.7% of Issues Advancing, 34.5% Declining
• 84 New 52-Week Highs, 20 New Lows
• 45.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.5%
• Vix 14.9 -1.7%
• Total Put/Call .82 -20.4%
• TRIN/Arms 1.41 -17.1%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 72.5 +1.25 basis points. 

• China Sovereign CDS 46.5 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 67.22 +.01%.

• FTSE 100 futures -.28%.

• S&P 500 futures -.46%.

• NASDAQ 100 futures -.52%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (ACN)/1.57
• (MOV)/.55

After the Close:

• (OXM)/1.05
• (PRGS)/.47
• (RH)/2.86

Economic Releases
8:30 am EST

• 4Q GDP is estimated to rise +2.3% versus a prior estimate of a +2.6% gain.
• 4Q Personal Consumption is estimated to rise +2.6% versus a prior estimate of a +2.8% gain.
• 4Q Core PCE is estimated to rise +1.7% versus a +1.7% gain in 3Q.
• Initial Jobless Claims for last week are estimated to fall to 220K versus 221K prior.
• Continuing Claims are estimated to rise to 1778K versus 1750K the prior week.
  

10:00 am EST

• Pending Home Sales MoM for Feb. is estimated to fall -.5% versus a +4.6% gain in Jan.

11:00 am EST

• The Kansas City Fed Manf. Activity Index for March is estimated at 0.0 versus 1.0 in February.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bowman speaking, China Trade Talks, Japan Industrial Production report, Eurozone Industrial Production report, Eurozone CPI report, weekly Bloomberg Consumer Comfort Index, $32B 7Y T-Note auction, EIA natural gas inventory report, Evercore ISI Retail Summit, (FL) investor meeting, (MOS) Analyst Day, (ADSK) Investor Day and the Sidoti Investor Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology 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 50% net long heading into the day.