Bull Radar

Style Outperformer:

• Mid-Cap Growth +2.0%

Sector Outperformers:

• 1) Alt Energy +4.6% 2) Gaming +3.5% 3) Gaming +3.4%

Stocks Rising on Unusual Volume:

• LTHM, TSLA, ATI, AQUA, RL, LITE, WORK, ALB, TXT, TCO, RBC, ALEC, INSM, HAE, PENN, RRR, MAC, ZBH, GDOT, HLI, ZUO, ENTG, SMPL, CLX, SWI, VIRT, EPC, UAL, LSCC, VRTU, UAL, VVV, OLED and PLAN

Stocks With Unusual Call Option Activity:

• 1) IQV 2) TMUS 3) EWH 4) CG 5) NBEV

Stocks With Most Positive News Mentions:

• 1) RL 2) CLX 3) ATI 4) ALLT 5) REGN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +26.5% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 76.0% of Issues Advancing, 21.7% Declining
• 155 New 52-Week Highs, 21 New Lows
• 58.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.2%
• Vix 15.9 -11.5%
• Total Put/Call .82 +12.3%
• TRIN/Arms .59 -44.3%

Tuesday Watch

Evening Headlines

Bloomberg:  

• China Cases Top 20,000; U.S. Braces for Pandemic: Virus Update.  

• China Signals Support With Yuan Fix Stronger Than 7 Per Dollar.

• Wall Street Gauges of Virus Fear, From Volatility to Dr. Copper.

• Biggest Fortunes Tied to China Stocks Cut $10.4 Billion in a Day.

• Princeton Isolates 108 Students as Precaution After China Trips. 

• China Erases 2% Drop in Minutes; U.S. Futures Rise. China’s stocks recouped a slide of more than 2% minutes after opening trading on Tuesday, helping stoke U.S. futures and lifting equities across Asia. China earlier set the daily yuan fixing at stronger than 7 per dollar, a sign of support, though it continued to trade weaker than that level offshore. Analysts are anticipating a series of measures to support economic growth as the hit to the country mounts. In the latest tally, China said its total death toll from the virus stood at 425 and cases rose to more than 20,000. “We feel like the world is moving under our feet because the probability of containment, looking at statistics daily, is a little bit of a fool’s errand,” Richard Lacaille, chief investment officer at State Street Global Advisors. Topix index rose 0.4% as of 10:39 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.4%. South Korea’s Kospi index rose 1.4%. Hong Kong’s Hang Seng Index rose 1.1%. Shanghai Composite Index rose 0.6% after dropping as much as 2.2%. S&P 500 futures rose 0.4%.

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

• Oil Slide Reaches $50 a Barrel After Virus Curbs China Demand.  

• OPEC+ Officials Meet for Urgent Check of Virus Threat to Oil.

• Democrats Gather to Vote in Iowa Caucuses.

Wall Street Journal:

• Iowa Results Could Winnow Democratic Field.

• The Flu Is Hitting Children Especially Hard This Season.

• Democrats Are Lying About My Argument.

• China’s Economic Contagion.

• Virus Outbreak a Major Test of China’s System, Xi Says.

• FAA Moves Toward Certifying Specific Drones for Package Deliveries.

• U.K. Aims to Curb Early Release of People Convicted of Terror Offenses.

Fox News:

• Influential radio host Limbaugh makes stunning announcement, says he will miss shows.

• LIVE COVERAGE: 2020 Dems fight to avoid caucus elimination.

CNBC:

• Here’s what US schools are doing in response to the coronavirus.

• Oil bear market deepens as OPEC talks emergency action to deal with coronavirus crisis.

• Uber and Lyft riders say coronavirus panic is causing drivers to discriminate.

• The advances 5G will enable are about to change everything.

Zero Hedge:

• China Confirms 2,350 New Coronavirus Cases; Death Toll Climbs To 425.

• Creator Of US BioWeapons Act Says Coronavirus Is Biological Warfare Weapon.

• Petition For WHO Director General To Resign Reaches Over 210,000 Signatures.

• 'Trump Might Trade Alaska To The Russians!' Cries Schiff During Closing Impeachment Remarks.

• Should Woke Social Media Barons Be The Arbiters Of Truth?

• Watch: The Bernie Surge Has MSNBC's Chris Matthews On The Verge Of Tears.

• Google Tumbles After Revenue, Profit Miss; Breaks Out YouTube, Cloud For First Time.

• Crude, Copper, & Credit Crushed As Stocks 'Dead-Bat-Bounce' (Again).

John Hopkins University:

• Wuhan Coronavirus Global Cases. (map)

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 56.0 -2.0 basis points.

• China Sovereign CDS 39.5  -4.0 basis points.

• Bloomberg Emerging Markets Currency Index  65.35 +.03%.

• FTSE 100 futures +.15%.

• S&P 500 futures +.34%.

• NASDAQ 100 futures +.38%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ATI)/.32

• (BP)/.10

• (CLX)/1.33

• (COP)/.81

• (CMI)/2.46

• (ETN)/1.40

• (EMR)/.66

• (LHX)/2.79

• (MCK)/3.49

• (PBI)/.12

• (RL)/2.45

• (RCL)/1.43

• (SPG)/2.97

• (SNE)/144.51

• (WAT)/3.01

• (ZBH)/2.27

After the Close:

• (AFL)/1.01

• (ALL)/3.21

• (BOOT)/.75

• (CERN)/.74

• (CMG)/2.75

• (CB)/2.15

• (TCS)/.05

• (ETH)/.26

• (F)/.17

• (GILD)/1.67

• (KLAC)/2.58

• (MCHP)/1.26

• (OI)/.48

• (PRU)/2.05

• (STX)/1.29

• (SNAP)/.01

• (DIS)/1.46

• (YRCW)/-.45

Economic Releases 
10:00 am EST

• Factory Orders for Dec. is estimated to rise +1.2% versus a -.7% decline in Nov.

• Factory Orders Ex Transports for Dec. is estimated to rise +.1% versus a +.3% gain in Nov.

Upcoming Splits

• None of note

Other Potential Market Movers

• The State of the Union, UK Construction spending report and the weekly US retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks HIgher into Final Hour on China Stimulus Hopes, US Economic Data, Short-Covering, Tech/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 18.0 -4.4%

• Euro/Yen Carry Return Index 124.72 +.02%

• Emerging Markets Currency Volatility(VXY) 6.78 -.59%

• S&P 500 Implied Correlation 43.78 +1.8%

• ISE Sentiment Index 74.0 +1
  

• Total Put/Call .67 -37.4%

• NYSE Arms 1.11 -47.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.7 +.12%
  

• America Energy Sector High-Yield CDS Index 647.0 +3.06%

• European Financial Sector CDS Index 53.89 -.66%

• Italian/German 10Y Yld Spread 139.25 +2.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 57.13 -1.93%
  

• Emerging Market CDS Index 194.44 -.87%
  

• iBoxx Offshore RMB China Corporate High Yield Index 170.05 +.09%

• 2-Year Swap Spread 6.0 -.5 basis point

• TED Spread 21.25 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -7.25 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.32 +.21%
• 3-Month T-Bill Yield 1.56% +1.0 basis point

• Yield Curve .20 +2.0 basis points

• China Iron Ore Spot 77.15 USD/Metric Tonne -3.47%

• Citi US Economic Surprise Index 15.90 +8.3 points

• Citi Eurozone Economic Surprise Index 18.90 -2.2 points

• Citi Emerging Markets Economic Surprise Index 24.8 +4.0 points

• 10-Year TIPS Spread 1.61 -2.0 basis points
• 38.0% chance of Fed April 29th meeting, 57.4% chance of cut at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -76 open in Japan 
• China A50 Futures: Indicating -135 open in China

• DAX Futures: Indicating -15 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.5%

Sector Underperformers:

• 1) Shipping -2.3% 2) Energy -1.7% 3) Coal -1.4%

Stocks Falling on Unusual Volume: 

• LSCC, DGII, MIDD, MRNA, LNTH, BZH, EPAY, VIAC, DNLI, SKT, DPZ, DDOG, DT, WWE, WBT, VLO, SFM, PSNL, PBF, SYY, TALO, ON, ENVA and VIR

Stocks With Unusual Put Option Activity:

• 1) ON 2) TMUS 3) XLY 4) XLB 5) XOM

Stocks With Most Negative News Mentions:

• 1) PRTS 2) LB 3) XOM 4) LSE 5) VZ

Charts:

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