Stocks Finish Substantially Lower on Coronavirus Fears, European/Emerging Markets/US High-Yield Debt Angst, Oil Plunge, Gaming/Homebuilding Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 77.3 +33.7%

• Euro/Yen Carry Return Index 122.76 -1.22%

• Emerging Markets Currency Volatility(VXY) 13.3 +6.6%

• S&P 500 Implied Correlation 86.4 +4.9%

• ISE Sentiment Index 73.0 +19
  

• Total Put/Call 1.28 +1.59%

• NYSE Arms .80 +110.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 125.64 +17.0%
  

• America Energy Sector High-Yield CDS Index 1,394.0 -2.69%

• European Financial Sector CDS Index 144.23 +10.4%

• Italian/German 10Y Yld Spread 262.75 +29.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 142.58 +10.86%
  

• Emerging Market CDS Index 416.27 +20.6%
  

• iBoxx Offshore RMB China Corporate High Yield Index 170.88 -.29%

• 2-Year Swap Spread 8.25 +4.5 basis points

• TED Spread 60.0 +11.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -81.0 -16.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.95 -1.69%
• 3-Month T-Bill Yield .19% -7.0 basis points

• Yield Curve .40 +7.0 basis points

• China Iron Ore Spot 85.7 USD/Metric Tonne -2.0%

• Citi US Economic Surprise Index 61.70 -12.1 points

• Citi Eurozone Economic Surprise Index 14.3 +.1 point

• Citi Emerging Markets Economic Surprise Index -41.2 -22.1 points

• 10-Year TIPS Spread .73 -19.0 basis point
• n/a chance of 100.0 basis point Fed rate cut at April 29th meeting, n/a chance of 100.0 basis point cut at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -532 open in Japan 
• China A50 Futures: Indicating -647 open in China

• DAX Futures: Indicating -189 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +63.6% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 4.3% of Issues Advancing, 95.2% Declining
• 0 New 52-Week Highs, 1,727 New Lows
• 5.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 29.8%
• Vix 74.7 +29.1%
• Total Put/Call 1.44 +14.3%
• TRIN/Arms 1.17 +205.2%

Monday Watch

Today's Headlines

Bloomberg:

• Fed Cuts Main Interest Rate to Near Zero, Vows Massive Bond-Buying Program.

• Powell Says Fed Has Room to Move, But Outlook Is Murky.  

• Hong Kong Cuts Benchmark Interest Rate, Following Fed’s Move.

• Central Banks Coordinate to Ensure Dollar Liquidity Around World.  

• California Seniors Told to Isolate; Fed Cuts Rate: Virus Update.

• Fauci Says Americans Must be Prepared to Hunker Down More.  

• Bar Hoppers Defy Virus Concerns, Make Last Call Before Shutdown.

• China Set for Unprecedented Contraction in Early-Year Data.  

• $54 Billion Manager Says He Now Fears a Global Credit Crunch.

• Mnuchin Sees No Recession; Goldman Reports Cases: Virus Update.    

• Eight Giant U.S. Banks to Suspend Stock Buybacks Through June.

• Mideast Stocks Drop Despite $47 Billion of Central Bank Aid.  

• Treasuries Surge With Yen; Stocks Slump in Asia. Treasuries surged and U.S. equity futures tumbled at the start of another volatile week as investors responded to a rapidly escalating economic hit from the coronavirus and a massive emergency move by the Federal Reserve to ease policy. The yield on Treasuries declined more than 30 basis points. Futures on the S&P 500 Index fell about 5%, hitting limits on trading, after stocks climbed more than 9% on Wall Street Friday -- recouping most of their 10% plunge the previous day. Japanese shares fluctuated. Wild swings have become an almost daily occurrence as investors assess the efficacy of actions by authorities to contain the coronavirus, moves that have had a crippling economic impact. Australian equities were about 5% lower. The yen soared after the Fed cut its key interest rate by a full percentage point to near zero and said it will boost its bond holdings by $700 billion. It came off its highs after the Bank of Japan said it will decide on policy today, bringing forward its meeting scheduled for later this week. Oil resumed declines. Futures on the S&P 500 fell 4.8%. The gauge advanced 9.3% on Friday. Japan’s Topix index added 0.9%%. Ausralia’s S&P/ASX 200 Index dropped 5%.

• Oil’s Crash Deepens in Tug-of-War Between Virus and Stimulus.  

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

• Fed Got Ambushed by a Pandemic and Now It’s Back in the Foxhole.

• Georgia Postpones March Democratic Primary to May Due to Virus.

• New Yorker Anxiety in Hamptons Leads to Hard Cash Demands.

• Colorado Governor Orders Ski Areas Closed on Virus Outbreak.  

• Global Oil Demand Heads for Record Annual Drop as Virus Spreads.  

• Plastics Had Been Falling Out of Favor. Then Came the Virus.

Wall Street Journal:   

• WSJ Special Report: The Coronavirus Crisis.

• Social-Distancing Forces Painful Choices on Small Businesses.

• Iran’s Coronavirus Strategy Favored Economy Over Public Health, Leaving Both Exposed.

• Measures Put Limits on Daily Life.

• Coronavirus and Insurance Policies: What Is Covered?

• Treasury to Help Advance Funds to Employers for Paid Sick Leave.

• Americans Fear Worst Is Yet to Come From Virus, Poll Finds.

• Silicon Valley Ramps Up Efforts to Tackle Virus. 

• Wynn Resorts to Close Las Vegas Casinos.

• Hospitals Push Off Surgeries to Make Room for Virus Patients.

MarketWatch.com:

• Thousands arriving from China and Europe at U.S. airports have faced no coronavirus screening.

Fox News:

• GOP senator pushing law to reduce America’s pharmaceutical dependence.

• Biden bristles as Sanders uses virus to push 'Medicare-for-all' at debate.

CNBC:   

• Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program.

• White House signals third relief bill to help airline and cruise industries hit by coronavirus pandemic.

• Coronavirus screening prompts hours-long bottlenecks at several US airports.

• Biden and Sanders to face off in first one-on-one Democratic presidential primary debate.

• Forget FANG. Here’s a new acronym for the coronavirus-fueled market panic.

• American Airlines cuts international capacity by 75% as demand collapses.

Zero Hedge:        

• Not Just Seniors: French Doctors Report 50% Of ICU Patients Under 60 Years Old, Netherlands Under 50.

• European Union: Closing The Borders?

• NYC Closes Schools Until April 20, US Death Toll Hits 64: Live Updates.

• Global GDP Growth Estimates Are Plummeting.

• Goldman Takes Out The Chainsaw: Cuts US Q2 GDP To -5%; Says Recession Has Begun.

• Chaos As 'Enhanced Screening' Airports Overwhelmed; US Citizens Scramble Back From Europe.

• FRA/OIS Tumbles In Early Trading... But It May Not Be Enough.

• Dr. Fauci Says He's Open To "National Shutdown", Warns Domestic Travel Ban "Not Out Of The Question".

• New York Governor Cuomo To Trump: Mobilize The Military.

• Another Cruise Ship Is Stranded At Sea As 5 Passengers & Crew Test Positive.

• California Governor Issues Executive Order Allowing State To Commandeer Hotels, Motels For Coronavirus Patients.

• Greece Erects Massive Concrete Blocks On Border To Halt Migrant Wave From Turkey.

• The Real Crisis Starts Now In Europe.

• "More Violent, More Persistent": Market Fear Worse Now Than In 2008, Man Who Inspired VIX Says.

Business Insider:

• Hoboken has become the first city in the US to implement a widespread curfew due to coronavirus fears.

• Nike will temporarily close all US retail stores for 2 weeks to limit the spread of the coronavirus pandemic.

• See inside the world's newest private jet: a $110 million converted Airbus airliner that looks like a flying penthouse apartment.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking coronavirus: Map, data and timeline.

Google Docs:

• Coronavirus Testing by State.

Night Trading

• Asian indices are -3.0% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 81.0 -3.75 basis points.

• China Sovereign CDS 55.5 + basis points.

• Bloomberg Emerging Markets Currency Index 61.03 +.18%.

• Euro Stoxx 50 futures -1.9%.

• S&P 500 futures -4.8%.

• NASDAQ 100 futures -4.6%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (REV)/-1.09

After the Close:

• (COUP)/.05

• (HQY)/.36

Economic Releases
8:30 am EST

• Empire Manufacturing for March is estimated to fall to 5.0 versus 12.9 in February.
  

4:00 pm EST

• Net Long-Term TIC Flows for Jan.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Industrial Production report, (RAD) analyst day and the (KSS) investor day 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 financial and commodity shares in the region. The Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg:

• Trump Says Holding Meetings at White House About Coronavirus.  

• Italy’s Monetary Chief Hits Back on Market Turmoil Engulfing ECB.

• Apple Shuts Hundreds of Stores; U.S. Passes Relief Plan: Virus Update.  

• Spain Plans Lockdown; NYC Reports First Death: Virus Update.

• N.Y. Hospitals Pitch Tents, Nix Surgeries to Prepare for Influx.

• Nightmare on Wall Street Was All About Liquidity.

• Trump Tests Negative; World Lockdown Takes Hold: Virus Update.

• Five Early-Warning Economic Indicators Show Virus Shock.

• Bond Markets on Red Alert for Policy Action After Historic Week.

• U.S. Defense Department Sets Domestic Travel Curbs for Personnel.  

• Latin America Announces Partial Lockdown as Coronavirus Spreads.  

• House Passes Trump-Backed Coronavirus Plan With Free Testing.  

• A Fifth of Virus Cruise Cases Asymptomatic, Study Says.  

• Dalio’s Macro Fund Plunged About 20% This Year as Market Tanked.

Wall Street Journal:   

• U.S. Expands Europe Travel Ban as Spain Locks Down.

• Coronavirus Forces Families to Rip Up Spring Travel Plans.

• Countries Close National Borders as Coronavirus Spreads.

• Grocers Fail to Keep Up With Demand as Coronavirus Pandemic Spreads.

• Sports, Retailers, Airlines, Autos: the Damage Across Business.

• U.S. Economic Outlook Hinges on Layoff Decisions. 

• U.S. Investigates Chinese Telecom Giant ZTE for Possible Bribery.

CNBC:

• Coronavirus live updates: Hospitals cancel elective surgeries, small businesses get pummeled.

• Apple(AAPL) to close all stores outside of China until March 27 in response to coronavirus.

• These new batteries technologies could be the future of energy storage.

• Grocers limit food purchases, urge shoppers not to hoard. Kroger ramps up hiring to stock shelves.

• Walmart reduces hours at all US stores to keep up with stocking groceries, household goods.

• France closes restaurants, cafes, movie theaters and other nonessential shops to fight coronavirus.

Barron's:

• Had bullish commentary on (ORCL), (UPS). (MRK), (NVS), (AMAT), (BDX), (SCHW), (PSX), (UNH), (ILMN), (KWR) and (HRI).

• Had bearish commentary on .

MarketWatch.com:

• 18 Stock Picks For Turbulent Times: Barron’s Roundtable.

• How do I self-quarantine? Can I answer the door or walk my dog? There can be legal consequences if you violate it.  

• Trump says he’ll ‘most likely’ get tested for coronavirus ‘fairly soon’.  

• Tests show new coronavirus can live on surfaces for as long as 3 days.

• Influenza kills more people than coronavirus so everyone is overreacting, right? Wrong — and here’s why.

Fox News:

• China reframes coronavirus narrative, touting Xi’s successes despite body count, global spread.

• American troops wounded as new barrage hits base housing in Iraq.

• Nursing home sees nearly 50 employees test positive for virus.

Zero Hedge:     

• Covid-19: European Leaders Finally Acknowledge Scale Of Crisis.

• "The Market Is Broken" - Why Nobody Is Trading Any More.

• UK's Coronavirus Strategy: Just Let It Happen And Hope For Herd Immunity.

• How Far Do Governments Need To Go In Restricting Citizens' Movements To Combat Covid-19?

• "Covid-19 Is An Exponential Threat" - Why Global Politicians & Business Leaders Must Act Now.

• "No State Is Prepared" - Mapping Where Hospitals Will Run Out Of Beds First If Virus Cases Spike.

• The Aftermath - Surveying The Wreckage From Last Week's Market-nado.

• "Don't Believe The Numbers" - Johns Hopkins Prof Fears "Worst Public Health Crisis Since Polio".

• Restaurant Traffic Implodes: New York, Seattle Plummet More Than 60%.

• Brawls Erupt As Americans Panic Hoard Supplies Amid Pandemic.

• Images From New York's First Drive-Thru Testing Facility.

• "It's Terrible": NYC Restaurants Shocked With "Mass Event Cancellations" As Virus Fears Grow.

• DARPA's Pandemic Prevention Platform Could Develop Therapeutic "Shield" To Fight Covid-19 By Summer.

• After 79% Sales Crash In February, China Automakers Beg Government For Bailout.

• US Equity Market Crashes Below 2007 Highs Despite Massive Surge On Trump Stimulus Plan.

Business Insider: 

• How Italy spiraled from a perfectly healthy country to near collapse in 24 days as the coronavirus took hold.

• Frustrated millennials say they can't get their aging parents to cancel their cruises, stop going to church, and take coronavirus seriously.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Google Docs:

• Coronavirus Testing by State.