Tuesday Watch

Evening Headlines

Bloomberg:              

• Cuomo Says New York Deaths Signal Possible Plateau in Outbreak.

• U.K.’s Johnson Moved to Intensive Care as Covid-19 Worsens.

• Brazilian Minister Says China Has Been Profiting From Pandemic.  

• Welcome to the $1.5 Trillion Minefield of Defaulted Chinese Debt.  

• Christine Lagarde’s $810 Billion Coronavirus U-Turn Came in Just Four Weeks.

• U.S. Deaths Top 10,000; Some Signs of Easing Toll: Virus Update.

• Asian Stocks to Build on Rally as Virus Toll Eases. Asian stocks looked set to build on a U.S. rally after the reported death tolls in some of the world’s coronavirus hot spots continued to show signs of easing. The yen maintained losses and Treasuries fell. S&P 500 futures fluctuated in early Asian trading Tuesday after the index finished up 7%, closing at its highest since March 13. Futures in Japan pointed to a strong open with Prime Minister Shinzo Abe expected to announce a month-long state of emergency as soon as Tuesday and details of a record stimulus package to combat the spread of the virus. Australian stocks and Hong Kong futures also rose. S&P 500 futures rose 0.2% as of 8:28 a.m. in Tokyo. The S&P 500 Index increased 7% in New York. Nikkei 225 futures were up 1.8%. Australia’s S&P/ASX 200 Index contracts climbed 2.4%. Hong Kong’s Hang Seng Index futures rose 1%.

• Oil Posts Largest Decline in 2 Weeks Ahead of Producers Meeting.  

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

• In the Big OPEC++ Output Deal, Who’s In and Who’s Out?   

• Demand for Gasoline Is Plummeting All Over the World.

• Pelosi Says Next Stimulus Round Will Be $1 Trillion or More.  

• Boeing Halts All Jet Assembly With Closing of Last 787 Plant.  

• Barrack Gives Up on Rescue, Says ‘We’re Fighting Politics’.

Wall Street Journal:

• Scientists Rush to Find Coronavirus Cure—but It Still Isn’t Fast Enough.

• Congress’s Small-Business Ventilator.

• The Fed’s New Mission to Save the Economy

• For Doctors Who Care For Pets, It’s Also a Trying Time.

• Coronavirus Hits Meat Plants.

• Credit Markets Show Signs of Stabilizing After Fed Intervention.

• Kroger Limits Shoppers.

• Airbnb Raises $1 Billion From Silver Lake, Sixth Street Partners.

• Container Shipping Lines Cancel Sailings to Weather Virus Storm.

• Coronavirus Cases Among World’s Elite Stoke Class Tensions.

CNBC.com: 

• Dow soars 1,600 points as growth rate of new coronavirus cases appears to slow.

• The bullish case for stocks with major averages already up more than 20% from the lows.

• Coronavirus: Trump says there’s light at the end of the tunnel with vaccine and treatment research.

• After a frenzied rush to file for small business loans, entrepreneurs wait it out.

• Wisconsin primary is on again for now as state Supreme Court blocks order to delay voting.

• Coronavirus live updates: Starbucks baristas to wear face masks, US cases now number 364,000.

• Trump and 3M agree to bring 166.5 million masks to US in three months to help coronavirus response.

• Gold is back above $1,700. Charts suggest an even bigger rally.

• Stocks making the biggest moves after hours: Gannett, Kraft Heinz, Boeing & more.

Fox News:

• British PM moved to ICU as coronavirus symptoms get worse.

• WATCH LIVE: Coronavirus task force gives updates on nationwide spread.

MarketWatch.com:        

• Individual investors have $1.5 trillion of cash on the sidelines, J.P. Morgan says. What next? 

• ‘The worst is behind us’ — with the most attractive risk-reward in years, it is time to buy stocks, Morgan Stanley says.  

• Investors should prepare for a coronavirus-induced ‘vicious spiral’ more than twice as bad as the financial crisis, says J.P. Morgan.

Zero Hedge:

• UCL Professor Warns Johnson Will "Very Likely" Be Placed On A Ventilator.

• Bailing-Out The Bailed-Out.

• Some Bad News From JPM: This Is What Happens After We Pass The Virus Peak.

• US Army Colonel (Ret.): "Yes, The COVID-19 Pandemic Could Have Originated In A Chinese Lab...".

• US Hospitals Face 'Severe' Shortages Of Tests And Protective Equipment: Inspector General.

• Morton's Parent Scrambles To Reopen Frozen Loan Market With Record-Yielding 15% Secured Paper.

• Gold Futures Extend Gains To 8 Year Highs After Pelosi's Trillion-Dollar Promise.

• Realtors Resort To Virtual Reality To Sell Homes During Lockdown.

• Food-Banks Warn They'll Soon Run Out Of Food As Economic Suffering Explodes All Over America.

• Yellen Blames "Enormous Debt And Buybacks" For Coming Default Wave; Morgan Stanley Says It's All The Fed's Fault.

• The Fraud That Is ESG Strikes Again: Six Of Top 10 ESG Funds Underperform The S&P500.

• US Total Passes 350k As Tri-State Area Cases, Deaths Surge: Live Updates.

• Netanyahu Announces Full Lockdown Of Israel Ahead Of Passover.

• Gold Soars To 8-Year Highs As Stocks Melt-Up On Massive Short-Squeeze.

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 +1.5% to +2.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 140.75 -8.75 basis points.

• China Sovereign CDS 54.50 -9.0 basis points.

• Bloomberg Emerging Markets Currency Index 57.98 +.06%.

• Euro Stoxx 50 futures +1.19%.

• S&P 500 futures +.38%.

• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ANGO)/-.03

• (FLR)/.13

• (GBX)/.26

• (LNN)/.47

• (REV)/-1.07

After the Close:

• (LEVI)/.35

Economic Releases
10:00 am EST

• JOLTS Job Openings for Feb. is estimated to fall to 6,500 versus 6,963 in Jan. 
  

3:00 pm EST

• Consumer Credit for Feb. is estimated at $14.0B versus $12.021B in Jan.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan Machine Orders report, weekly US retail sales reports, $25B 10Y T-Note auction, Wells Fargo Biotech Virtual Conference and the (JCP) analyst day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by consumer discretionary and transport shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

Stocks Soaring into Final Hour on Peak Coronavirus Hopes, Less European/Emerging Markets/US High-Yield Debt Angst, Short-Covering, Consumer Discretionary/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 44.5 -5.0%

• Euro/Yen Carry Return Index 122.13 +.29%

• Emerging Markets Currency Volatility(VXY) 12.77 -.39%

• S&P 500 Implied Correlation 71.7 +.7%

• ISE Sentiment Index 69.0 +31.0 points
  

• Total Put/Call .97 9.4%

• NYSE Arms .86 +53.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 118.68 -6.1%
  

• America Energy Sector High-Yield CDS Index 1,480.0 +3.52%

• European Financial Sector CDS Index 118.06 -9.38%

• Italian/German 10Y Yld Spread 191.5 -7.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 143.70 -3.95%
  

• Emerging Market CDS Index 363.43 -6.54%
  

• iBoxx Offshore RMB China Corporate High Yield Index 156.14 +.01%

• 2-Year Swap Spread 22.75 -2.75 basis points

• TED Spread 133.0 +2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 54.5 -12.0 basis points
• MBS  5/10 Treasury Spread  122.0 -8.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.95 +.75%
• 3-Month T-Bill Yield .08% +1.0 basis point

• Yield Curve .40 +3.0 basis points

• China Iron Ore Spot 79.61 USD/Metric Tonne -.33%

• Citi US Economic Surprise Index -44.3 -3.0 points

• Citi Eurozone Economic Surprise Index -72.70 -.3 point

• Citi Emerging Markets Economic Surprise Index -1.9 -.6 point

• 10-Year TIPS Spread 1.03 +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 +314 open in Japan 
• China A50 Futures: Indicating +244 open in China

• DAX Futures: Indicating +14 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer staple/industrial/tech/biotech/medical sector long

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +5.5%

Sector Underperformers:

• 1) Tobacco +2.6% 2) Foods +2.8% 3) Shipping +2.8%

Stocks Falling on Unusual Volume: 

• SPTN, HESM, SPSC, HXL, RHI, NUS, SMPL and ZM

Stocks With Unusual Put Option Activity:

• 1) IMMU 2) W 3) PK 4) KBH 5) THC

Stocks With Most Negative News Mentions:

• 1) LK 2) EL 3) BK 4) SBUX 5) ZM

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +7.5%

Sector Outperformers:

• 1) Homebuilding +15.9% 2) Retail +10.0% 3) Gaming +9.2%

Stocks Rising on Unusual Volume:

• IMMU, DDS, W, ERI, LGIH, PVH, SNBR, KSS, VIR, DIN, JWN, CCL, KBH, USFD, ULTA, BILL, DKS, RCL, WSM, DFS, ETSY, CACC, AGYS, MGM, MAR, EAT, LEVI, TTD, FUN, WWD, PLNT, ALLY, RH, TPX, FND, PII, SPG, WYNN, DOCU, HASI, ADS, SQ, AXP, CBRL, CAR, PRAA, HLT, THC, LASR, XPO, PD, REG, HOG, PENN, BA, WD, PLAY, MCS, STWD and H

Stocks With Unusual Call Option Activity:

• 1) ADM 2) IMMU 3) GRUB 4) APC 5) TIP

Stocks With Most Positive News Mentions:

• 1) CODX 2) GEOS 3) CMTL 4) CMP 5) BA

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +61.4% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 91.4% of Issues Advancing, 8.1% Declining
• 5 New 52-Week Highs, 5 New Lows
• 3.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.3%
• Vix 45.1 -3.7%
• Total Put/Call .89 -16.8%
• TRIN/Arms 1.10 +110.7%