Stocks Slightly Higher into Final Hour on China Trade Deal Hopes, Technical Buying, Short-Covering, Retail/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.5 -1.7%

• Euro/Yen Carry Return Index 130.09 -.03%

• Emerging Markets Currency Volatility(VXY) 8.45 -1.86%

• S&P 500 Implied Correlation 36.43 -1.3%

• ISE Sentiment Index 115.0 +38.5%
  

• Total Put/Call .81 -4.71%

• NYSE Arms .63 -55.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 61.25 -1.27%
  

• America Energy Sector High-Yield CDS Index 513.0 +.16%

• European Financial Sector CDS Index 77.44 +1.49%

• Italian/German 10Y Yld Spread 252.5 -.75 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 66.53 -.49%
  

• Emerging Market CDS Index 172.54 +.30%
  

• iBoxx Offshore RMB China Corporate High Yield Index 160.98 -.01%

• 2-Year Swap Spread 10.5 -.75 basis point

• TED Spread 18.75 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -14.25 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.48 unch.
• 3-Month T-Bill Yield 2.42% unch.

• Yield Curve 17.5 -1.25 basis points

• China Iron Ore Spot 91.56 USD/Metric Tonne +1.57%

• Citi US Economic Surprise Index -55.10 +2.6 points

• Citi Eurozone Economic Surprise Index -61.0 -8.0 points

• Citi Emerging Markets Economic Surprise Index -11.60 -2.0 points

• 10-Year TIPS Spread 1.91 unch.
• 15.3% chance of Fed rate cut at June 19th meeting, 21.0% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +76 open in Japan 
• China A50 Futures: Indicating +112 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

• Slightly Higher: On gains in my retail/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.4%

Sector Underperformers:

• 1) Software -1.2% 2) Papers -1.1% 3) Disk Drives -1.0%

Stocks Falling on Unusual Volume: 

• RECN, SGMO, MFGP, ZS, SHOP, TSLA, BILI, OKTA, HUYA, ROKU, CDNA, WDAY and RNG

Stocks With Unusual Put Option Activity:

• 1) AET 2) NYT 3) MPC 4) NLSN 5) SLV

Stocks With Most Negative News Mentions:

• 1) ODP 2) RRGB 3) ROKU 4) TSLA 5) NTNX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.7%

Sector Outperformers:

• 1) Homebuilding +2.4% 2) Gold & Silver +1.9% 3) Gaming +1.1%

Stocks Rising on Unusual Volume:

• IOVA, PLAY, LQDA, RPM, HOME, WIFI, TUR, STZ, WBC, I, MCRN, CW, PFBC, RES, OLLI, PPBI, AMSWA, MRNA, PCAR, XEC, KRNT, BA, WSBC, YRD and UCBI

Stocks With Unusual Call Option Activity:

• 1) SPLV 2) STZ 3) HOG 4) NOW 5) XLF

Stocks With Most Positive News Mentions:

• 1) STZ 2) TGT 3) ABEO 4) HRS 5) JAZZ

Charts:

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

Afternoon Market Internals

NYSE Composite Index:

• Volume Running -17.3% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 56.9% of Issues Advancing, 39.7% Declining
• 122 New 52-Week Highs, 15 New Lows
• 51.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.5%
• Vix 13.8 +.5%
• Total Put/Call .80 -5.9%
• TRIN/Arms .68 -52.1%

Thursday Watch

Evening Headlines

Bloomberg:     

• U.S. Said to Set 2025 Target for China to Fulfill Trade Pledges.

• U.K. Parliament Acts to Block a Potentially Chaotic No-Deal Brexit. 

• China’s Influence Digs Deep Into Europe’s Political Landscape. 

• Asian Stocks Mixed After Rally to a Six-Month High. Stocks in Asia were mixed Thursday after a regional gauge rallied to a six-month high. Sovereign-bond yields retained their recent gains as investors await further results from U.S.-China trade negotiations. Shares in Australia sank, while those in Hong Kong, Tokyo and Seoul were little changed. Chinese equities advanced. The S&P 500 Index edged up to the highest since October on Wednesday. Australian bonds declined, tracking an overnight move lower in Treasuries. The pound held gains after the U.K.’s House of Commons passed a bill to block a no-deal Brexit. Japan’s Topix index rose 0.2 percent as of 10:46 a.m. in Tokyo. Australia’s S&P/ASX 200 Index slipped 0.9 percent. South Korea’s Kospi gained 0.3 percent. Hong Kong’s Hang Seng Index was little changed. Shanghai Composite Index rose 0.8 percent. Futures on the S&P 500 Index were flat.  

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

• Fear and Greed Are Both AWOL as U.S. Stocks Approach Record Highs.

• SoftBank to Seek $15 Billion More for Its Huge Tech Fund.  

• There's Hated Stocks, Then There's Really Hated Stocks. And They're Killing It.

Wall St. Journal:

• After Mueller Report, CNN Turns to Mulligan Report.

• If You Like Socialism, You’ll Love the VA.

• Ethiopia Pilots Initially Followed Boeing’s Emergency Steps.

• A Revolution Sweeping Railroads Upends How America Moves Its Stuff.

• Theresa May Meets Opposition Leader in Risky New Brexit Strategy.

Fox News:

• NATO boss tells Congress President Trump’s tough talk to alliance members is … working.

• Biden's alleged 'groping' behavior unearthed in old 'Daily Show' segment.

CNBC:

• China admitted for the first time that the US ‘has a point’ on IP theft, hacking, Larry Kudlow says.

• Amazon(AMZN) has quietly removed promotional spots that gave special treatment to its own products.

• Stocks coiled to spring higher to records if Friday's jobs report doesn't bomb again.

• Chip stocks can 'bust through' to new highs if investors stay bullish on 5G: Analyst. 

• Corona maker Constellation to sell about 30 brands in a $1.7 billion deal.

• Semiconductors are killing it—thanks to China.

• McDonald’s(MCD) announced 2 deals in a week. Here’s why investors should care.

Zero Hedge:

• The Manhattan Housing Market Is On Its Worst Cold Streak In 30 Years.

• After Losing Big On Collusion, Democrats Are Now 'Inventing A Coverup': WSJ.

• The Dangers Of The New Democratic Socialism.

• Icahn Dumps $550 Million Lyft Stake To George Soros Ahead Of IPO Debacle.  

• Tesla(TSLA) Q1 Deliveries Plummet, Miss Across The Board; Musk Warns Will "Negatively Affect" Net Income.

• Trump To Give China Until 2025 To Commit To Trade Deal.

• Famous Hedge Fund Earns 30% Providing Payday Advances To Rap Artists.

• 'Creepy' Biden Scrambles Into Damage Control Overdrive, Vows He'll Be "More Respectful" Of Personal Space.

• "I Cry When I Think Back How Things Used To Be" – What Has Happened To The America We Grew Up In?

• Millions Of Facebook Records Found On Amazon Cloud Servers.

• Beto O'Rourke Reverses Position On Reparations, Pledges To Sign Bill To Study It.

• Credit, Curves & Crypto Jump As Stocks Shrug Off Dismal Data Dump.

Business Insider:

• Verizon(VZ) has turned on its superfast 5G mobile network in 2 cities, and there's actually a phone you can buy right now to use with it.

• One of the world's most important programmers, Linus Torvalds, says Twitter, Facebook, and Instagram are 'a disease'.

• The biggest jewelry chain in the world is giving up on America's dying shopping malls.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 66.25 -1.5 basis points. 

• China Sovereign CDS 42.0 -.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 67.47 unch.

• FTSE 100 futures -.15%.

• S&P 500 futures +.03%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (STZ)/1.72

• (ISCA)/.60

• (SCHN)/.46

After the Close:

• (DLTH)/.75

Economic Releases
7:30 am EST

• Challenger Job Cuts for March.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 215K versus 211K the prior week.

• Continuing Claims are estimated to fall to 1750K versus 1756K prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Factory Orders report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Deutsche Bank Shipping Summit and the (F) 1Q sales conference call could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by financial and technology shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.