Thursday Watch

Evening Headlines
Bloomberg:

• U.S., China Aim for Early-May Announcement on Trade Deal.  

• U.K. Manufacturing Chief Sees ‘No Good News’ in Brexit Extension.

• Asian Stocks Mixed; Treasuries Tick Higher. Asian stocks were mixed Thursday after the latest batch of corporate earnings did little to boost their U.S. counterparts. Treasuries inched higher. Shares in Japan and South Korea drifted, while those in Australia eked out gains. Earlier, the S&P 500 Index retreated, led by a drop in health-care providers on concern about policy changes. Earnings from financials and transportation bellwethers painted a mixed picture on the state of the economy. The dollar was little changed. Japan’s Topix index was little changed as of 9:03 a.m. in Tokyo. South Korea’s Kospi was flat, Australia’s S&P/ASX 200 Index added 0.2 percent. The S&P 500 fell 0.2 percent, while the Nasdaq 100 added 0.3 percent.  

• Trump-Xi Deal, China Recovery Query, Inflation Whodunit: Eco Day.  

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

• It's Steel Stocks’ Turn as Chinese Stimulus Lifts Demand.

• Mortgage Investors Keep a Wary Eye on Surging Home Purchases.

• Powell Adopts an Inflation Stance Yellen Shunned.   

• Health Stocks Crumble as Fears of ‘Medicare for All’ Snowball.

Wall Street Journal:

• Prosecutors Charge Health Professionals In Opioid Crackdown.

• The Russia Probe Started With the Spies Who Marked Me.

• North Korea Says It Test-Fired New Tactical Guided Weapon.

• U.S. and China Set Tentative Timeline for New Trade Talks.

Fox News:

• With Mueller report looming, Trump approval rating after probe revealed in Fox News Poll.

MarketWatch.com:

• IPO market faces biggest week of 2019 so far with Pinterest, Zoom and Greenlane on tap.

CNBC:

• JP Morgan(JPM) names new CFO, and Marianne Lake moves to top consumer lending role.
• After-hours buzz: Las Vegas Sands, Pier 1, Atlassian & more.

Zero Hedge:

• "Tariff Hangover:" Trade Volume Plunges At U.S. West Coast Ports.

• Senate Leaders Want Information On "Highly Classified" FBI Memo About Clinton.

• Tesla Loses Three More Executives, Including Former Model 3 Director Of Manufacturing.

• San Francisco, Los Angeles, & Seattle: 3 Formerly Beautiful West Coast Cities Have Become Hellholes.

• Barr, Rosenstein To Hold 9:30AM Press Conference As DOJ Releases Mueller Report.

• Florida Prosecutors Plan To Release Kraft Rub-And-Tug Video.

• The Bank of Japan Is Now A Top-10 Shareholder In 50% Of All Japanese Companies.

• Nasdaq 100 Hits Record High As Semis Soar; Healthcare & Small Caps Hammered.

Business Insider:

• Video conferencing company Zoom prices IPO at $36 per share, giving it a $9.2 billion valuation — 9 times its last private valuation.

• Alexandria Ocasio-Cortez says she left Facebook because 'social media poses a public health risk to everybody'.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 63.25 -.75 basis point.

• Asia Pacific Sovereign CDS Index 41.0 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 67.48 -.01%.

• S&P 500 futures +.03%

• NASDAQ 100 futures +.01%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (AXP)/1.97

• (BBT)/1.03

• (BX)/.59

• (CHKP)/1.31

• (DHR)/1.02

• (GPC)/1.31

• (HTLD)/.19

• (HON)/1.84

• (KEY)/.42

• (MAN)/1.36

• (PM)/1.01

• (PPG)/1.21

• (RF)/.37

• (SLB)/.30

• (SKX)/.73

• (SNA)/2.90

• (STI)/1.30

• (TSM)/2.44

• (TRV)/2.75

• (UNP)/1.87

After the Close:

• (ISRG)/2.70

Economic Releases
8:30 am EST

• Retail Sales Advance MoM for March is estimated to rise +1.0% versus a -.2% decline in Feb.

• Retail Sales Ex Autos MoM for March is estimated to rise +.7% versus a -.4% decline in Feb. 

• Retail Sales Ex Autos and Gas for March is estimated to rise +.4% versus a -.6% decline in Feb.

• The Philly Fed Business Outlook Index for April is estimated to fall to 11.0 versus 13.7 in March.

• Initial Jobless Claims for last week are estimated to rise to 205K versus 196K the prior week.

• Continuing Claims are estimated to rise to 1722K versus 1713K prior.

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for April is estimated to rise to 52.8 versus 52.4 in March.

• The Preliminary Markit US Services PMI for April is estimated to fall to 55.0 versus 55.3 in March.
  

10:00 am EST

• The Leading Index for March is estimated to rise +.4% versus a +.2% gain in Feb.

• Business Inventories for Feb. is estimated to rise +.3% versus a +.8% gain in Jan.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The release of the Mueller report on Russia, Australia Employment Change report, Japan CPI report, weekly Bloomberg Consumer Comfort Index, Bloomberg Economic Expectations Index for April and the  weekly EIA natural gas inventory report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity 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.

Stocks Slightly Lower into Final Hour on "Medicare-For-All" Fears, Technical Selling, Profit-Taking, Biotech/Medical Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 12.53 +2.87%

• Euro/Yen Carry Return Index 131.57 +.2%

• Emerging Markets Currency Volatility(VXY) 8.23 +.61%

• S&P 500 Implied Correlation 35.68 +.93%

• ISE Sentiment Index 99.0 +7.61%
  

• Total Put/Call .80 -13.0%

• NYSE Arms .97 +3.19%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.40 +.45%
  

• America Energy Sector High-Yield CDS Index 501.0 +.22%

• European Financial Sector CDS Index 69.12 -1.29%

• Italian/German 10Y Yld Spread 253.25 +.5 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 62.71 -1.61%
  

• Emerging Market CDS Index 174.58 -1.02%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.40 +.04%

• 2-Year Swap Spread 9.75 -.25 basis point

• TED Spread 17.5 -2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -16.25 -1.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.51 +.13%
• 3-Month T-Bill Yield 2.43% +1.0 basis point

• Yield Curve 19.25 +1.25 basis points

• China Iron Ore Spot 89.40 USD/Metric Tonne -.95%

• Citi US Economic Surprise Index -62.60 +.6 point

• Citi Eurozone Economic Surprise Index -41.10 +.7 point

• Citi Emerging Markets Economic Surprise Index 4.90 +9.0 points

• 10-Year TIPS Spread 1.95 -1.0 basis point
• 6.2% chance of Fed rate cut at June 19th meeting, 10.2% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +22 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +49 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bull Radar

Style Outperformer:

• Large-Cap Value -.3%

Sector Outperformers:

• 1) Disk Drives +1.8% 2) Disk Drives +1.8% 3) Gaming +1.7%

Stocks Rising on Unusual Volume:

• QCOM, NEW, HOLI, NICE, ERIC, CARS, WVE, TXT, VFF, VEC, ACMR, SRRK, NIU, ABB, MRTN, DQ, BIS, BR, SAFM, VFC, MRVL, DPZ, INTC, KSU and UAL

Stocks With Unusual Call Option Activity:

• 1) ITCI 2) UNH 3) DISH 4) QCOM 5) CSX

Stocks With Most Positive News Mentions:

• 1) QCOM 2) CSX 3) PZZA 4) TXT 5) KSU

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +6.4% Above 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 49.0% of Issues Advancing, 47.9% Declining
• 82 New 52-Week Highs, 20 New Lows
• 58.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.0%
• Vix 12.5 +2.9%
• Total Put/Call .84 -8.7%
• TRIN/Arms .99 +5.3%

Wednesday Watch

Night Trading 

• Asian equity indices are unch. to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.0 unch.

• Asia Pacific Sovereign CDS Index 42.0 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 67.39 -.04%.

• S&P 500 futures +.01%

• NASDAQ 100 futures +.08%.

Morning Preview Links 

Earnings of Note 

Company/Estimate

Before the Open:

• (ABT)/.62
• (ASML)/.48
• (BMI)/.37
• (BK)/.96
• (KSU)/1.44
• (MS)/1.17
• (PEP)/.93
• (TXT)/.69
• (USB)/1.00 

After the Close:

• (AA)/-.14
• (BXS)/.55
• (CCI)/1.37
• (ETFC)/.93
• (KMI)/.25
• (LVS)/.86
• (PIR)/-.24
• (SLG)/1.70 
• (URI)/3.04

Economic Releases

8:30 am EST

• The Trade Balance report for Feb. is estimated to widen to -$53.4B versus -.

10:00 am EST

• Wholesale Inventories MoM for Feb. is estimated to rise +.3% versus a +1.2% gain in Jan.
• Wholesale Trade Sales MoM for Feb. is estimated to rise +.3% versus a +.5% gain in Jan.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,564,330 barrels versus a +7,029,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,720,750 barrels versus a -7,710,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,176,750 barrels versus a -116,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.89% versus a +1.1% gain prior.
  

2:00 pm EST

• U.S. Fed Beige Book.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Retail Sales/Industrial Production/GDP reports, UK Inflation data, weekly MBA Mortgage Applications report and the BofA Merrill Auto Summit could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial 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.