Friday Watch

Evening Headlines

Bloomberg:     

• Cases Surge in Seattle; eBay Bans Face Masks: Virus Update.

• Outbreak Stretches U.S. Health System With Supply, Test Shortage.  

• NYC Urges Self-Isolation for Visitors to 5 Nations: Virus Update.  

• Central Banks Just Starting Virus Fight With Record Low Rates.

• Asia Stocks Slide, Bonds Soar After Wall St. Slump: Markets Wrap. The sell-off in global stocks resumed in Asia Friday as optimism about fiscal packages round the world to address the blow from the coronavirus evaporated. Thirty-year Treasury yields slid through 1.5% for the first time. Japanese equities sank about 2% and Australian shares retreated with the country’s bond yields. The S&P 500 Index fell more than 3% in Thursday’s session. Investor confidence remains in tatters as virus cases continue to rise across the U.S. despite efforts to contain the outbreak and its impact. The yen remains around the six-month high it reached Thursday. Japan’s Topix index lost 2% as of 9:48 a.m. in Tokyo. South Korea’s Kospi index retreated 1.8%. The S&P 500 Index dropped 3.4%. Futures added 0.1%. Australia’s S&P/ASX 200 Index lost 1.9%.  

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

• Treasury 30-Year Bond Yield Falls Below 1.5% for First Time.  

• Lawmakers Say Banks Need Guidance on Virus-Related Workarounds.  

• U.S. Coal Use Is Plunging at Fastest Rate Since Eisenhower Era.  

• Oil Steadies as Market Waits for Clarity on OPEC Production Cut.

Wall Street Journal:

• Big Labor’s Big Crooks.

• Elizabeth Warren’s Exit Spurs Competition for Her Voters.

• Schumer and the War on Judges.

• Hemp Suppliers at Odds With Hazy Regulations.

• Schools Shut in Seattle Area as Virus Spreads.

• Virus Snarls Trans-Pacific Shipping, Ripples Through U.S. Business.

• White House to Send 500 ICE Agents to Aid Sanctuary City Arrests.

• NYPD Officials Say New Bail Law Is Leading to a Crime Increase.

Fox News:

• At Fox News Town Hall, president swipes at Biden's gaffes: 'There's something going on there'.

MarketWatch.com:      

• Mortgage rates fall to all-time low amid coronavirus concerns — here’s why Americans may not take advantage of them.  

• Fed’s Kaplan thinks U.S. can avoid recession from coronavirus.  

• AMD maintains guidance amid coronavirus scare, stock moves higher.

CNBC:

• Coronavirus live updates: S&P Global says $211 billion could be wiped out from Asia Pacific economies.

• Venture firm Sequoia is sounding the alarm about the economy again as coronavirus spreads.

• Dow tanks more than 950 points as Wall Street’s roller-coaster week continues.

• Robinhood client files lawsuit for negligence over two-day trading outages.

• Airline shares fall to lowest levels in years as coronavirus saps demand.

• Stocks making the biggest moves after hours: American Outdoor Brands, H&R Block, Okta and more.

• Hand sanitizer prices surge to $50 a bottle — here’s how to make it at home for under $2.

• JPMorgan is moving hundreds of traders to backup offices as Wall Street braces for coronavirus.

• 10-year Treasury yield hits all-time low below 0.9% as virus fears fuel demand for US debt.

Zero Hedge:

• Jamie Dimon Has Emergency Surgery Over 'Heart Tear'.

• "We Don't Know What's Going On": Wall Street Admits It Is Clueless.

• "Fake! Everything Is Fake!" Wuhan Residents Heckle Vice PM During Public Relations Stunt.

• Bloomberg Launching New Group To Support Democratic Nominee, Attack Trump.

• Studies Show Fracking Ban Would Wreak Havoc On US Economy. 

• "The Worst Is Yet To Come": Nomura Now Sees As Many As 1.5 Million Covid Cases By June.

• Trump Refuses To Answer Questions About Testing-Kit Shortages, Santa Clara County. Confirms Another 6 Cases, San Fran Shutters School: Live Updates.

• WHO: Coronavirus Is More Deadly Than Originally Thought.

• "Super Puke" - US Stocks Crash As Credit Markets & Yields Collapse.

Business Insider: 

• San Francisco's first 2 cases of coronavirus were just confirmed. Authorities say the disease is likely being transmitted in the city.

• JPMorgan CEO Jamie Dimon underwent emergency heart surgery.

• Costco says coronavirus fears gave it a sales boost and stirred up 'crazy' demand.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Night Trading 

• Asian equity indices are -2.25% to -1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 69.75 +4.75 basis points.

• China Sovereign CDS 49.25 +6.25 basis points.

• Bloomberg Emerging Markets Currency Index  63.54 -.12%.

• FTSE 100 futures -1.62%.

• S&P 500 futures -.52%.

• NASDAQ 100 futures -.30%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases
8:30 am EST

• The Trade Balance for Jan. is estimated at -$46.2B versus -$48.9B.

• Change in Non-Farm Payrolls for Feb. are estimated to fall to 175K versus 225K in Jan.

• The Unemployment Rate for Feb. is estimated at 3.6% versus 3.6% in Jan.

• Average Hourly Earnings MoM for Feb. is estimated to rise +.3% versus a +.2% gain in Jan.

10:00 am EST

• Wholesale Trade Sales MoM for Jan. 
  

3:00 pm EST

• Consumer Credit for Jan. is estimated at $16.5B versus $22.055B in Dec.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Factory Orders report and the (REGN) conference call could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Morning Market Internals

NYSE Composite Index:

• Volume Running +31.7% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 14.7% of Issues Advancing, 83.8% Declining
• 29 New 52-Week Highs, 256 New Lows
• 37.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.9%
• Vix 35.3 +10.2%
• Total Put/Call .87 -31.0%
• TRIN/Arms 1.11 +15.6%

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%