Thursday Watch

Evening Headlines

Bloomberg:    

• ECB Announces 750 Billion Euro Pandemic Bond-Buying Program.  

• China Builders Face Defaults as Cashflow Comes Under Pressure   

• Brazil Cuts Rates to 3.75% With Recession Likely After Virus.

• Senate Passes Virus Relief Bill, Plans for Even Bigger Stimulus.

• Stocks Climb With Euro on Massive ECB Support Move. Stocks and U.S. equity futures climbed after the European Central Bank announced a huge boost in its efforts to stabilize the economy and capital markets, adding to global efforts that have largely underwhelmed investors so far. The euro rose, Japanese shares gained about 2%, and S&P 500 futures reversed losses following news of the ECB’s temporary program of asset purchases worth 750 billion euros ($820 billion) to fight the impact of the coronavirus pandemic. U.S. shares earlier suffered another plunge as investor focus turned to assessing the length of the economic downturn. Oil rose to take back some of Wednesday’s 24% plunge that left prices at an 18-year low. Japan’s Topix index gained 2.3% as of 9:05 a.m. in Tokyo. Futures on the S&P 500 Index rose 1.9%. The underlying index fell 5.2% on Wednesday. Australia’s S&P/ASX 200 Index added 0.4%. South Korea’s Kospi index gained 0.6%.

• Oil Rollercoaster Has Crude Rebounding After Drop to 18-Year Low.  

• The Saudis Have a High-Stakes Plan to Win the Global Oil War.  

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

• U.S. Rescue Plan, QE Down Under, ECB Emergency Call: Eco Day.

• GM’s CEO Offers to Make Ventilators in WWII-Style Mobilization.  

• How a Coronavirus Test Shortage Threatens Paid Sick Leave Promises.  

• Target, Clorox Among Giants Lobbying to Keep Shelves Stocked.  

• CDC ‘Mortality’ Report Cites Nursing Home Risks as Cases Mount.

Wall Street Journal:

• New York City Had a Coronavirus Warning Sign: Spikes in ER Visits.

• Turmoil in Funding Markets Drags Down Mortgage REITs.

• Americans Losing Work as Businesses Cut Back Over Virus.

• China’s Coronavirus Response Toughens State Control and Weakens the Private Market.

• The Economic Rout Accelerates.

• Yes, Flatten the Curve.

• America Needed Coronavirus Tests. The Government Failed.

• Detroit Car Makers to Temporarily Close U.S. Plants Over Virus Concerns.

• Staff at Kirkland Facility With Coronavirus Outbreak Spread It to Other Facilities, Study Finds.

• Mexico Slow to Implement Strong Measures Against Coronavirus.

CNBC.com:   

• Dow drops 1,300 points, S&P 500 loses 5% as coronavirus market sell-off reaches new low .

• NY state likely has ‘tens of thousands’ of coronavirus cases, Gov. Cuomo says

• Senate passes coronavirus relief plan to expand paid leave, sends it to Trump

• Dow futures point to 300-point gain after ECB announces massive stimulus package.

• NYSE to temporarily close floor, move to electronic trading after positive coronavirus tests.

• NYC mayor pushes for ‘shelter-in-place’ order as coronavirus cases surge to almost 1,900.

• Stocks making the biggest moves after hours: Williams-Sonoma, Guess, Tailored Brands & more.

• Zoom CFO explains how the company is grappling with increased demand.

Fox News:

• White House seeks 2 rounds of checks to Americans in massive coronavirus response.

• Beijing's handling of coronavirus 'ruined' global 'brand,' Hanson says.

• Is it safe to open your mail amid the coronavirus pandemic?

MarketWatch.com:     

• These low-volatility stocks have outperformed during the coronavirus crash.

• These 15 companies are working on coronavirus treatments or vaccines — here’s where things stand.

• Brace for credit shocks as heaps of U.S. oil-field service company debt comes, warns Moody’s.

• Tesla to reduce workforce at Fremont factory from 10,000 to 2,500: report.

Zero Hedge:

• JPMorgan Now Expects A Global Depression In The Second Quarter.

• First US Congressman Tests Positive For Covid-19: Live Updates.

• Lagarde Fires Bazooka #2: ECB Announces €750BN Pandemic Purchase Program.

• Netflix And Quarantine: App Downloads Spike In Coronavirus Lockdown Zones.

• "The Panic Is Palpable": Gundlach Covers All His Stock Shorts, Is Flooded With "Art At Slashed Prices". JPM Cuts Q2 GDP To -14%: "The Lamps Are Going Out All Across The Economy".

• US Restaurant Association Projects Up To 7 Million Jobs Lost Over 3 Months.

• Kudlow Says US "May Take Equity Position" As Part Of Coming Bailouts.

• NYSE Kicks Out Humans, Moving Temporarily To Fully Electronic Trading.

• 62% Of Americans Believe Media Has Exaggerated Covid-19 Risk, New Poll Shows.

• Covid-19 Could Bankrupt Most Airlines By End Of May.

• All Bills Up To Three Months Now Have Negative Yields.

• The CDC Was Fighting Racism & Obesity Instead Of Stopping Epidemics.

• 15 Among Brazilian Delegation That Met With Trump Now Have Coronavirus.

• "We're About Halfway There" - Historic Carnage Everywhere Sparked By Dollar Margin Call Panic.

Business Insider: 

• JPMorgan Chase is closing 20% of its branches and reducing staffing amid the coronavirus pandemic, but it will pay employees asked to stay home

• Oil plummets 26% to 18-year low as global price war escalates

• The biggest mall operator in the US is closing all locations for 12 days to slow the spread of COVID-19

• CVS clarifies its worker policies after more than 1,700 employees sign a petition demanding paid sick leave, face masks, and gloves as stores are overrun with customers

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Google Docs:

• Coronavirus Testing by State.

Night Trading 

• Asian equity indices are -2.0% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 154.5 +14.5 basis points.

• China Sovereign CDS 69.25 -2.0 basis points.

• Bloomberg Emerging Markets Currency Index  58.41 -.22%.

• Euro Stoxx 50 futures +1.0%.

• S&P 500 futures +.35%.

• NASDAQ 100 futures +.79%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ACN)/1.73

• (CMC)/.49

• (DRI)/1.89

• (GIII)/.67

• (LEN)/.84

• (LK)/-.13

After the Close:

• (CTAS)/2.03

• (OLLI)/.76

• (SCHL)/-.64

Economic Releases
8:30 am EST

• The Current Account Balance for 4Q is estimated at -$108.6B versus -$124.1B in 3Q.

• Philly Fed Business Outlook Index for March is estimated to fall to 8.0 versus 36.7 in Feb.

• Initial Jobless Claims for last week are estimated to rise to 220K versus 211K the prior week.

• Continuing Claims are estimated to rise to 1738K versus 1722K prior.

10:00 am EST

• The Leading Index for Feb. is estimated to rise +.1% versus a +.8% gain in Jan.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Swiss Central Bank decision, Bloomberg Economic Expectations Index for March, weekly Bloomberg Consumer Comfort Index and the (HSY) 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 technology and financial shares in the region. The Portfolio is 25% net long heading into the day.

Stocks Substantially Lower into Final Hour on Coronavirus Fears, European/Emerging Markets/US High-Yld Debt Angst, Oil Plunge, Energy/Financial Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume: Heavy

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 83.7 +10.0%

• Euro/Yen Carry Return Index 121.92 -.73%

• Emerging Markets Currency Volatility(VXY) 13.9 +6.4%

• S&P 500 Implied Correlation 86.35 +.4%

• ISE Sentiment Index 58.0 -3
  

• Total Put/Call 1.49 +46.1%

• NYSE Arms 1.67 +167.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 143.73 +15.4%
  

• America Energy Sector High-Yield CDS Index 1,484.0 +1.5%

• European Financial Sector CDS Index 163.97 +14.4%

• Italian/German 10Y Yld Spread 267.0 -12.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 151.21 +6.7%
  

• Emerging Market CDS Index 456.72 +17.0%
  

• iBoxx Offshore RMB China Corporate High Yield Index 171.03 +.04%

• 2-Year Swap Spread 9.75 -.5 basis point

• TED Spread 89.25 +27.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -26.75 +19.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.29 -2.17%
• 3-Month T-Bill Yield .01% -16.0 basis points

• Yield Curve .56 +18.0 basis points

• China Iron Ore Spot 89.24 USD/Metric Tonne +.70%

• Citi US Economic Surprise Index 60.70 +3.1 points

• Citi Eurozone Economic Surprise Index 2.8 -.3 point

• Citi Emerging Markets Economic Surprise Index -40.3 -.3 point

• 10-Year TIPS Spread .64 unch.
• 88.3% chance of no change at April 29th meeting, 80.7% chance of no change at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -436 open in Japan 
• China A50 Futures: Indicating -481 open in China

• DAX Futures: Indicating -155 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer staple, biotech, tech, medical, industrial sector longs

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +104.90% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 5.5% of Issues Advancing, 94.2% Declining
• 7 New 52-Week Highs, 1,807 New Lows
• 4.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 28.0%
• Vix 75.3 -.76%
• Total Put/Call 1.67 +63.7%
• TRIN/Arms .98 +53.1%