Stocks Surging into Final Hour on Coronavirus Peak Hopes, Global Stimulus, End-of-Quarter Window-Dressing, Tech/Pharma Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 59.0 -10.0%

• Euro/Yen Carry Return Index 123.62 -.96%

• Emerging Markets Currency Volatility(VXY) 12.83 +1.23%

• S&P 500 Implied Correlation 75.5 +2.1%

• ISE Sentiment Index 100.0 unch.
  

• Total Put/Call 1.12 +5.7%

• NYSE Arms 1.60 -9.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 111.34 +3.17%
  

• America Energy Sector High-Yield CDS Index 1,227.0 -8.97%

• European Financial Sector CDS Index 118.47 +5.69%

• Italian/German 10Y Yld Spread 197.25 +17.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 146.31 +6.7%
  

• Emerging Market CDS Index 357.79 +4.98%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.69 -2.5%

• 2-Year Swap Spread 27.0 +1.5 basis points

• TED Spread 149.0 +7.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 28.25 +4.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.45 -1.07%
• 3-Month T-Bill Yield .02% +6.0 basis points

• Yield Curve .45 -3.0 basis points

• China Iron Ore Spot 80.55 USD/Metric Tonne -3.79%

• Citi US Economic Surprise Index -1.5 -.2 point

• Citi Eurozone Economic Surprise Index -41.60 +16.1 points

• Citi Emerging Markets Economic Surprise Index -24.8 -.6 point

• 10-Year TIPS Spread .95 -1.0 basis point
• n/a chance of no change at April 29th meeting, n/a chance of no change at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +111 open in Japan 
• China A50 Futures: Indicating -10 open in China

• DAX Futures: Indicating -39 open in Germany

Portfolio:

• Higher: On gains in my consumer staple/tech/biotech/industrial sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +35.8% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 46.9% of Issues Advancing, 51.8% Declining
• 4 New 52-Week Highs, 43 New Lows
• 3.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.6%
• Vix 60.9 -7.1%
• Total Put/Call 1.0 -5.7%
• TRIN/Arms 1.40 -21.4%

Monday Watch

Today's Headlines

Bloomberg:

• Trump Says He’s Extending Virus Distancing Guidance to April 30.  

• China’s Big Banks Brace for the Worst After Record Profit Run.

• Spanish Covid-19 Deaths Surpass 6,500 as Hospitals Overwhelmed.  

• Europe Gets No Respite From Virus Lockdowns After Deadly Weekend.

• India Orders States to Quarantine Laborers As Infections Rise.  

• U.K. Virus Lockdown Could Be Significantly Longer, Gove Says

• Germany Headed for Key Medical Kit Shortages, Experts Tell Paper.     

• Doctors Say It’s Only a Matter of Time Before Virus Sweeps India.  

• Social Distancing Offenders in Australia Facing A$1,600 Fines.

• U.S. Extends Measures; Singapore Central Bank Move: Virus Update.

• Stocks Decline With More Virus Warnings; Oil Drops. Stocks in Asia retreated with U.S. equity futures and crude oil slumped after the top American infectious disease expert said deaths from the coronavirus in the world’s largest economy may reach 200,000. Treasuries nudged higer. Japan’s Topix index dropped about 3% with a majority of the gauge’s companies trading without the right to the latest dividend. Korean stocks fell, while Australian ones took back a slice of a Friday tumble. Crude dropped below $20 a barrel in New York at one point. Singapore’s dollar reversed losses after the monetary authority reduced the slope of its currency band, while affirming the current level. Japan’s Topix index fell 3.2% as of 9:01 a.m. in Tokyo. Futures on the S&P 500 declined 1.3%. The S&P 500 fell 3.4% on Friday. South Korea’s Kospi slid 2.6%. Australia’s S&P/ASX 200 Index added 0.7%.

• Kuwait Leads Drop in Mideast Stocks After Downgrade: Inside EM.  

• Oil Plummets to 17-Year Low as Broken Market Drowns in Crude.  

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

• Mnuchin Says Small Business Loans Up and Running This Week.  

• ‘President Cuomo’ Is New Daydream for Those Fretting Over Biden.

• Amazon(AMZN) Workers Plan Strike at Staten Island Warehouse, CNBC Says.  

• Mortgage Bankers Ask SEC to Save Them From Wave of Margin Calls.  

• Ackman to Trump: Put Americans Back to Work on Infrastructure.

Wall Street Journal:

• Pandemic Compels Historic Labor Shift.

• Manufacturers Seek U.S. Help on Where to Ship Medical Goods.

• Virus Could Overwhelm the Social Safety Net.

• After Three Stimulus Packages, Congress Already Prepping No. 4.

• Doctors Are Frightened by Their Own Coronavirus Symptoms.

• Ways Older Adults Can Cope With the Stress of Coronavirus.

• Italy’s South Braces for a Coronavirus Surge.

• The Road Back to Normal: More, Better Testing.

• Innovate From Your Couch.

• An Update on the Coronavirus Treatment.

• Doctors Are Frightened by Their Own Virus Symptoms.

• Big Hedge Funds Pivot in Market Turmoil.

MarketWatch.com:

• This chart reflects the panic investors have felt amid the stock turmoil of recent weeks. 

• Dr. Fauci says as many as 200,000 Americans could die from the coronavirus.  

• This crushing double blow for the oil sector could force a wave of consolidation, say analysts.

Fox News:   

• Trump says coronavirus 'peak in death rate' likely in 2 weeks, extends social-distancing guidelines.

• Nearby state’s crackdown on those fleeing virus epicenter prompts Cuomo lawsuit threat.

• Here’s how likely you are to catch coronavirus from food or packaging.

CNBC: 

• Coronavirus live updates: Fauci backs NY travel advisory as de Blasio says medical supplies running low.

• The coronavirus is starting to hit rural America hard —here’s a map of the counties most affected.

• This could be worst job market for new college grads since the financial crisis.

• Goldman says market will turn lower and won’t bottom until these 3 things happen.

• ‘Nothing is out of the question’: What it would take for the Fed to start buying stocks.

Zero Hedge:           

• White House Extends Coronavirus Guidelines Until April 30, Trump Expects "Peak" In About 2 Weeks.

• WTI Crashes Below $20, Stocks Drop, Gold Pops As Trump Extends Lockdown.

• WHO Issues Statement On Taiwan After Rude Official Shills For China.

• Goldman's Buyback Desk: Companies Representing $190BN In Buybacks, 25% Of Total, Have Already Suspended Repurchases.

• New York Internet Speeds Have Plunged As Locked-Down Americans Clog Networks.

• 'Dark Money' Groups & Super PACs Target Trump With Multi-Million Dollar Coronavirus Ad Campaign.

• Mayor Grants NYPD Power To Issue Fines Up To $500 For Failing To 'Social Distance': Live Updates.

• The Unthinkable Is Happening: Oil Storage Space Is About To Run Out.

• Wondering Why There's Such A Shortage Of Masks? Ask The FDA!

• A Roadmap To Reopening: Scott Gottlieb Lays Out Next Steps In National COVID-19 Response.

• Jefferies' CFO Dies From Coronavirus.

• After Receiving $25 Million Coronavirus Bailout, JFK Center Stops Paying Musicians.

• China Suffers Economic Double-Whammy As Current Global Demand Collapse Follows Earlier Supply Crash.

• The West Needs To Wake Up To China's Duplicity.

• COVID-19 Outbreak Infects 66 At Maryland Nursing Home.

• "The Industry Has Never Experienced Anything Like This Before": 3% Of All Restaurants Have Already Closed Permanently.

• "There's No Gold" - COMEX Report Exposes Conditions Driving Physical Crunch.

• French Official Says Quarantine Should Not Be Enforced In Migrant Areas To Avoid Riots.

• More Evidence China Is Lying; Number Of Urns More Than Double Reported Coronavirus Deaths.

Business Insider:

• Many of the world's airlines could be bankrupt by May because of the COVID-19 crisis, according to an aviation consultancy. These airlines have already collapsed because of the pandemic.

• See exactly what's in the $2 trillion stimulus bill.

• Coronavirus: Boris Johnson's government reportedly furious with China.

• Here are the 19 US states that are in the best fiscal position for a recession.

• 2 experts share advice for safely shopping for groceries during the coronavirus pandemic.

• You can check out out more than 1,000 of the world's finest art museums online for free through Google — take a look inside.

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 141.0 +14.0 basis points.

• China Sovereign CDS 53.0 +9.5 basis points.

• Bloomberg Emerging Markets Currency Index 59.02 -.11%.

• Euro Stoxx 50 futures -.9%.

• S&P 500 futures -1.32%.

• NASDAQ 100 futures -1.17%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CALM)/.28

• (LK)/-.13

After the Close:

• (CRON)/-.04

• (RH)/3.59

Economic Releases
10:00 am EST

• Pending Home Sales MoM for Feb. is estimated to fall -1.8% versus a +5.2% gain in Jan.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for March is estimated to fall to -9.5 versus 1.2 in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Germany CPI report, Japan Industrial Production report and the China Manufacturing PMI report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are lower, weighed down by financial and technology 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 week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Global Economy Week by Bloomberg. 
• The Week Ahead by Yahoo. (video)
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on coronavirus fears, oil weakness, European/Emerging Markets/US High-Yield debt angst, yen strength, global recession worries and technical selling. My intermediate-term trading indicators are giving bearish signals and the Portfolio is 25% net long heading into the week.