Thursday Watch

Evening Headlines

Bloomberg:       

• Global Economy Is Gripped by Rare Twin Supply-Demand Shock.

• IMF Sees ‘More Dire’ Global Economic Possibilities on Virus.

• Toyota Recalls 3.2 Million Vehicles Globally to Fix Fuel Pumps.

• Asia Extends Global Stock Rally on Stimulus Hope. Asian stocks extended a global equity rally after an emergency U.S. spending bill to combat the impact of the coronavirus added to signs of support from policy makers around the world. Treasuries edged higher and U.S. stock futures slipped. Equities climbed across the region with the Asian benchmark set for a fourth day of gains. Earlier, the S&P 500 surged more than 4% in the wake of Congress authorizing nearly $8 billion for virus prevention. The Bank of Canada joined this week’s wave of global central bank action and Australia’s finance minister on Thursday said stimulus will come very soon as speculation grew that governments will provide more help with the outbreak hitting economic growth prospects. Joe Biden’s surprise surge in Tuesday’s presidential primaries added to bullish sentiment. Treasuries nudged higher after the curve steepened on Wednesday, a sign investors see more U.S. stimulus coming. The yuan slipped after recouping all the losses since the coronavirus outbreak. Japan’s Topix index rose 1% as of 10:28 a.m. in Tokyo. South Korea’s Kospi climbed 0.5%. Hong Kong’s Hang Seng rose 0.5%. The Shanghai Composite added 0.8%. Futures on the S&P 500 Index dipped 0.7%. The underlying gauge advanced 4.2% on Wednesday. Australia’s S&P/ASX 200 Index gained 1.5%.  

• Oil Rises as Stimulus Measures Lift Optimism on Demand Outlook.  

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

• China Stimulus Shot, BOE Pressure, U.S. Emergency Bill: Eco Day.

• California Declares Emergency; Dog Tests Positive: Virus Update. 

• House Passes $7.8 Billion for Emergency Virus Spending.

• Biden Decries ‘Negative Attacks’ After Sanders Airs Ads.  

• Just 29% of Americans Can Work Remotely, Leaving 100 Million in Virus Limbo.

Wall Street Journal:

• Socialism Just Bombed.

• Rescue Teams Comb Rubble Day After Tennessee Tornadoes.

• Senate Passes Bill Requiring 5G Security Review.

• Refugees Stream Across Turkey, Trying to Enter the EU.

Fox News:

• These are the states with confirmed coronavirus cases, fatalities across US.

MarketWatch.com:   

• President Trump blames Obama for coronavirus testing problems.

• Billionaire Bill Ackman is hedging his bets as coronavirus looms over market.

• Here’s what Apple suppliers have been saying about the coronavirus epidemic.

• All sporting events in Italy will be played without fans for the next month over coronavirus fears.

CNBC:

• Coronavirus updates: China reports 31 more deaths, California declares state of emergency.

• Campbell Soup is increasing production to prepare for coronavirus demand.

• Stocks making the biggest moves after hours: American Eagle, Zoom, Marvell & more.

• Clean your phone at least once a day, says infectious disease specialist — here’s how.

• Amazon, other delivery services hit with delays as online shopping surges amid coronavirus outbreak.

Zero Hedge:

• "Serious Action Must Be Taken" - Trump Slams Schumer's "Direct & Dangerous" Threats To Supreme Court Over Abortion Case.

• Globalization And Our Precarious Medical Supply Chains.

• Apple(AAPL) Issues Warning Over iPhone Replacement Shortage.

• Operations Suspended At F-35 Stealth Jet Factory In Japan Due To Virus Fears.

• Jet Fuel Prices Dive Amid Stalling Aviation Industry; Global Tourism Bust Imminent.

• Fauci Warns Outbreak Could Overwhelm US Health-Care System, Trump To Sign $8.3 Billion Virus-Fighting Bill: Live Updates.

• Scientists Discover More Aggressive Strain Of Coronavirus Responsible For 70% Of Current Infections.

• Wuhan Seafood Market, Ground-Zero For Coronavirus Outbreak, Demolished.

• Ukrainian Court Throws Wrench Into Joe Biden's 2020 Election Plans.

• 'Joementum' Sparks Stock Buying-Panic, Rate-Cut Hopes Soar.

Business Insider: 

• United is drastically cutting flights worldwide and offering unpaid leave to employees as the coronavirus ravages the airline industry.

• The CEO of Zoom says that the coronavirus outbreak is going to drive way more companies to remote work even after it's all over.

Caixin:

• Lights Are On but No One’s Working: How China's Local Governments Are Faking Coronavirus Recovery.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Night Trading 

• Asian equity indices are +.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.0 -3.75 basis points.

• China Sovereign CDS 43.0 -5.5 basis points.

• Bloomberg Emerging Markets Currency Index  63.99 -.05%.

• FTSE 100 futures +.41%.

• S&P 500 futures -.84%.

• NASDAQ 100 futures -.76%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BJ)/.40

• (BURL)/3.23

• (CIEN)/.38

• (DCI)/.46

• (KR)/.55

• (TECD)/4.82

• (TTC)/.58

After the Close:

• (CHUY)/.12

• (COO)/2.72

• (COST)/2.06

• (LOCO)/.16

•  (HRB)/.56

• (OKTA)/-.05

• (NX)/-.06

Economic Releases 
7:30 am EST

• Challenger Job Cuts for Feb.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 215K versus 219K the prior week.

• Continuing Claims are estimated to rise to 1738K versus 1724K prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan Leading Index, OPEC meeting, weekly EIA natural gas inventory report, Bloomberg Consumer Comfort Index and the (TDOC) investor day 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 staple 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.

Bear Radar

Style Underperformer:

• Small-Cap Value +1.8%

Sector Underperformers:

• 1) Oil Service -2.2% 2) Shipping -.8% 3) I-Banks +.3%

Stocks Falling on Unusual Volume: 

• CAR, LNG, SAIA, NSTG, KSS, DLTR, BX, CWH, GPMT, NCLH, FHI, HAIN, PBF, HAL, HPE, BTAI, SMPL, HTZ, RRGB, ALRM, DRQ, XENT, XAN, LPLA, INSW, HIIQ, URBN, CODX, REPH and CDLX

Stocks With Unusual Put Option Activity:

• 1) INO 2) JWN 3) CLF 4) XLF 5) DLTR

Stocks With Most Negative News Mentions:

• 1) SG 2) EOLS 3) NWL 4) LPLA 5) AMBA

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.9%

Sector Outperformers:

• 1) Healthcare +8.0% 2) Utilities +4.4% 3) Drugs +4.1%

Stocks Rising on Unusual Volume:

• VTIQ, EHTH, ANTM, CNC, HUM, LVGO, GH, UNH, CI, PLAY, KPTI, GCP, WSO, BNFT, SYNH, CPB, ZGNX, XNCR, CVET, HCAT, INSP, DY and EWBC

Stocks With Unusual Call Option Activity:

• 1) OPK 2) EWJ 3) CPB 4) AMBA 5) APC

Stocks With Most Positive News Mentions:

• 1) ANF 2) LYFT 3) ALNY 4) HD 5) ACM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +34.1% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 82.1% of Issues Advancing, 15.9% Declining
• 15 New 52-Week Highs, 75 New Lows
• 29.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 34.5%
• Vix 33.4 -9.3%
• Total Put/Call .90 +11.1%
• TRIN/Arms 1.42 -47.1%

Wednesday Watch

Night Trading 

• Asian equity indices are -1.0% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 68.75 +3.5 basis points.

• China Sovereign CDS 48.5 +4.75 basis points.

• Bloomberg Emerging Markets Currency Index  64.08 +.08%.
• FTSE 100 futures -.35%.

• S&P 500 futures +.60%.

• NASDAQ 100 futures +.75%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (ANF)/1.23
• (BF/B)/.50
• (CPB)/.66
• (DLTR)/1.75
• (JW/A)/.54
• (NAV)/-.24
• (PLCE)/1.57 

After the Close:

• (AEO)/.36
• (MRVL)/.16
• (SPLK)/.97
• (ZM)/.07

Economic Releases 

8:15 am EST

• The ADP Employment Change for Feb. is estimated to fall to 170K versus 291K in Jan.
  

10:00 am EST

• The ISM Non-Manufacturing Index for Feb. is estimated to fall to 54.9 versus 55.5 in Jan.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,865,830 barrels versus a +452,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -2,079,180 barrels versus a -2,691,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,887,730 barrels versus a -2,115,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.37% versus a -1.5% decline prior.
  

2:00 pm EST

• US Fed Beige Book report.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Services PMI report, weekly MBA Mortgage Applications report, UBS Consumer/Retail Conference, Morgan Stanley Energy/Power Conference, (JCOM) analyst day, (ZEN) investor day and the (GE) investor call could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Reversing Substantially Lower into Final Hour on Coronavirus Fears, Central Bank Action Disappointment, Global Growth Worries, Energy/Transport Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 37.8 +12.9%

• Euro/Yen Carry Return Index 124.3 -.7%

• Emerging Markets Currency Volatility(VXY) 8.0 -3.5%

• S&P 500 Implied Correlation 59.1 +9.2%

• ISE Sentiment Index 111.0 +39
  

• Total Put/Call .93 -30.0%

• NYSE Arms 2.50 +117.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 69.64 +7.23%
  

• America Energy Sector High-Yield CDS Index 584.0 -4.15%

• European Financial Sector CDS Index 69.64 -12.44%

• Italian/German 10Y Yld Spread 162.75 -14.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 66.88 -1.23%
  

• Emerging Market CDS Index 233.69 +.72%
  

• iBoxx Offshore RMB China Corporate High Yield Index 171.25 -.04%

• 2-Year Swap Spread 7.5 +1.25 basis points

• TED Spread 29.0 +9.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 13.25 +38.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 64.0 +.17%
• 3-Month T-Bill Yield .91% -26.0 basis points

• Yield Curve .27 -4.0 basis points

• China Iron Ore Spot 86.0 USD/Metric Tonne +.22%

• Citi US Economic Surprise Index 55.70 -1.3 points

• Citi Eurozone Economic Surprise Index 3.9 +.8 point

• Citi Emerging Markets Economic Surprise Index -14.5 -.6 point

• 10-Year TIPS Spread 1.45 +4.0 basis points
• 57.9% chance of 75.0 basis point Fed rate cut at April 29th meeting, 53.8% chance of 75.0 basis point cut at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -217 open in Japan 
• China A50 Futures: Indicating -29 open in China

• DAX Futures: Indicating -167 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/industrial/biotech/medical/retail sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long