Thursday Watch

Evening Headlines

Bloomberg:                

• World Economy Faces $5 Trillion Hit That Is Like Losing Japan.  

• Johnson Improving in Hospital With Extended U.K. Lockdown Likely.

• Global Cases Surpass 1.5 Million; N.Y. Deaths Jump: Virus Update.

• China Developers Were in Weakened Position Even Before Virus Hit.

• Reserve Drawdown of $105 Billion Signals Emerging Currency Risk.

• Asia Stocks to Rise After U.S. Rally; Oil Soars: Markets Wrap.  Asian stocks were mixed Thursday following a three-day rally as investors mulled the spread of the coronavirus and when economies will be able to ramp up again. Oil rose amid expectations for production cuts. Shares in Tokyo dipped and were higher in Sydney and Seoul. S&P 500 Index futures edged up after the gauge jumped 3.4% -- bringing its rise from the March low to more than 20%. Oil climbed after Algeria confirmed that the OPEC+ emergency meeting scheduled for Thursday will discuss an output cut of 10 million barrels per day. A spokeswoman for Russian energy ministry said the nation will commit to cuts based on its proportion of the total production. Treasury yields held on to gains. Futures on the S&P 500 advanced 0.5% as of 9:01 a.m. in Tokyo. The gauge rose 3.4% on Wednesday. Japan’s Topix index slipped 0.2%. South Korea’s Kospi gained 1.8%. Australia’s S&P/ASX 200 Index added 1.2%.

• Oil Extends Rally as Producers Close In on Deal to Cut Output.  

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

• Trump Health Team Crafts Plan to Open Economy If Virus Peaks.

• Airlines Squeezed By Delays in $29 Billion U.S. Rescue Package.

• Smoking Helps Open Gateway to Coronavirus Infection, Study Shows.  

• Amazon Warehouse Warned Staff Not to Touch Shipments for 24 Hours.  

• Hand Sanitizer Will Be Hard to Find for a Long, Long Time.

Wall Street Journal:

• GOP Bid to Give More Aid to Business Runs Into Democrats’ Push for Broader Relief.

• Veterans Affairs Hospitals Facing Shortage of Protective Gear.

• After ICU, Virus Patients’ Ordeal Is Far From Over.

• Airbnb’s Coronavirus Crisis: Burning Cash, Angry Hosts and an Uncertain Future.

• Virus Wipes Out Advertising for Digital-Media Upstarts.

• Saudis Take Big Stakes in European Oil Companies.

• Trump Eyes Tariffs as Tool to Tame Oil Glut.

CNBC.com:

• Coronavirus updates: Global cases cross 1.5 million, California releases staggering jobless number.

• Trump escalates tension with WHO over coronavirus pandemic, repeats threat to withhold funding.

• Five million more unemployment claims expected, but now layoffs could be more permanent.

• Stocks making the biggest moves after hours: Disney, Costco, Virgin Galactic & more.

• Disney shares jump as Disney+ subscriptions pass 50 million.

• While parents Zoom, their kids are flocking to an app called Roblox to hang out and play 3D games.

Fox News:

• Global health organization’s boss takes cryptic ‘body bags’ swipe at Trump after funding threat.

• CDC considers relaxing virus rules, letting some Americans return to work.

MarketWatch.com:         

• Exclusive: These for-profit colleges could reap up to $1 billion in federal bailout money.

• Starbucks says earnings cut roughly in half due to coronavirus effects in second quarter.

• Mark Cuban explains how stock-market bears feel about bulls: ‘I don’t think they are really. factoring in what they are going to see on the other side’ of coronavirus .

• 1 in 5 Americans now personally know someone with the coronavirus.

Zero Hedge:

• Global Coronavirus Cases Top 1.5 Million, Deaths Approach 90k: Live Updates.

• If Every Citizen Had N95 Masks, Would Government Be Justified In Locking-Down The Population Next Time?

• Nomura: "This Unenthusiastic, Inorganic Bear Market Rally" Faces An April 22 Day Of Reckoning.

• Bankrupting America.

• Calls For Global Debt Jubilee Grow Louder As 'Anything Goes' Policy Mania Takes Over.

• Just How Bad Is It Going To Get: JPMorgan Halts All Non-Government Guaranteed Small Business Loans.

• States Use "Purge" Sirens, Fines, And Arrests To Force People To Comply With Stay-At-Home Order.

• Pelosi Warns Next Small Business Stimulus Spending Bill Would Not Pass House If Democrats Don't Get What They Want.

• COVID-19 To "Shock" US Economy Into Deep Recession, 13% Unemployment By June, WSJ Survey Says.

• Three In Four Americans Have Self-Isolated In Their Household: Gallup.

• S&P Futures Surge 20 Points In One Tick On $2BN MOC Buy Imbalance.

• Stocks Bounce On 'Peak Virus' Hope Despite World's Deadliest Day Yet.

Business Insider:  

• Sweden didn't lock down, now braces for death surge.

• Electricity use in the US has plummeted more over the past 3 weeks than it did during the entire 2008 recession — and economists say that's a more timely picture of this downturn's true impact.

• Amazon and Walmart are facing shortages and delays of essentials like toilet paper and cleaning supplies, but you might find them on one of these alternative websites.

• Gap canceled its orders for the next 2 seasons, and experts say it could be the start of a downward spiral for mall brands.

The Epoch Times: 

• Tracking Down the Origin of the Wuhan Coronavirus. (video documentary)

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 +.5% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 131.75 -7.5 basis points.

• China Sovereign CDS 48.75 -3.75 basis points.

• Bloomberg Emerging Markets Currency Index 58.66 +.05%.

• Euro Stoxx 50 futures +.89%.

• S&P 500 futures +.29%.

• NASDAQ 100 futures +.23%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CONN)/.35

After the Close:

• (SJR)/.32

• (WDFC)/1.21

Economic Releases
8:30 am EST

• PPI Final Demand MoM for March is estimated to fall -.4% versus a -.6% decline in Feb.

• PPI Ex Food and Energy MoM for March is estimated unch. versus a -.3% decline in Feb.

• Initial Jobless Claims for last week are estimated to fall to 5250K versus 6648K the prior week.

• Continuing Claims are estimated at n/a versus 3029K prior.
  

10:00 am EST

• Preliminary Univ. of Mich. Consumer Confidence is estimated to fall to 75.0 versus 89.1 in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed Chairman Powell speaking, German Trade Data report, weekly EIA natural gas inventory report, Wells Fargo Biotech Day and the (GPS) conference call could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and consumer discretionary shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Surging into Final Hour on Peak Coronavirus Hopes, Oil Gain, Short-Covering, Gaming/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 43.4 -7.0%

• Euro/Yen Carry Return Index 122.63 -.3%

• Emerging Markets Currency Volatility(VXY) 12.2 +.33%

• S&P 500 Implied Correlation 75.8 -4.8%

• ISE Sentiment Index 87.0 -14.0 points
  

• Total Put/Call 1.05 +9.4%

• NYSE Arms .90 -23.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 105.02 -7.3%
  

• America Energy Sector High-Yield CDS Index 1,219.0 -1.31%

• European Financial Sector CDS Index 109.46 -1.31%

• Italian/German 10Y Yld Spread 195.75 +3.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 137.64 +.02%
  

• Emerging Market CDS Index 339.44 -1.68%
  

• iBoxx Offshore RMB China Corporate High Yield Index 156.85 +.79%

• 2-Year Swap Spread 25.75 +.75 basis point

• TED Spread 117.0 -11.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 43.75 -3.25 basis points
• MBS  5/10 Treasury Spread  117.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.62 +.21%
• 3-Month T-Bill Yield .18% +8.0 basis points

• Yield Curve .50 +4.0 basis points

• China Iron Ore Spot 80.20 USD/Metric Tonne +1.74%

• Citi US Economic Surprise Index -42.9 n/a

• Citi Eurozone Economic Surprise Index -67.60 n/a

• Citi Emerging Markets Economic Surprise Index .4 n/a

• 10-Year TIPS Spread 1.19 +2.0 basis points
• 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 -8 open in Japan 
• China A50 Futures: Indicating +19 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +2.2%

Sector Underperformers:

• 1) Coal -4.8% 2) Video Gaming -.1% 3) Foods +.1%

Stocks Falling on Unusual Volume: 

• DDS, HCAT, SPTN, EHTH and VIR

Stocks With Unusual Put Option Activity:

• 1) AFL 2) XLK 3) EWY 4) KSS 5) APO

Stocks With Most Negative News Mentions:

• 1) GLUU 2) LVS 3) TAL 4) EHTH 5) CVX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +4.1%

Sector Outperformers:

• 1) Gaming +10.3% 2) Homebuilding +9.3% 3) Healthcare Providers +5.4%

Stocks Rising on Unusual Volume:

• THC, PENN, ERI, NVAX, CHEF, AMBC, SPR, DIN, LEVI, WYNN, RCL, UAL, ZM, SGH, CAKE, PLAY, FWONK, AAL, GBX, CCL, JWN, NCLH, BA, SRI, STOR and DAL

Stocks With Unusual Call Option Activity:

• 1) APO 2) ETN 3) APC 4) HLF 5) IMMU

Stocks With Most Positive News Mentions:

• 1) GNMK 2) LEVI 3) PINS 4) NVAX 5) INSG

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +14.9% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 83.8% of Issues Advancing, 14.7% Declining
• 4 New 52-Week Highs, 5 New Lows
• 5.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.3%
• Vix 43.4 -7.0%
• Total Put/Call 1.09 +13.5%
• TRIN/Arms .65 -44.4%