Thursday Watch

Evening Headlines

Bloomberg:         

• China’s Historic Slump to Lay Bare the Scale of the Task Ahead.

• South Korea Plans Emergency Handouts to Households Hit by Virus.   

• Lockdown Hammers U.K. High Street Stores as Retail Sales Slump.

• Global Cases Top 2 Million; South Korea Elections: Virus Update.  

• Seafood Market Craters After Restaurants Are Shuttered Worldwide.  

• Yen Primed for Advance Toward 100 as Fed Stimulus Saps Dollar.

• Stocks Fall After Poor U.S. Data; Dollar Climbs: Markets Wrap. Asian stocks declined along with U.S. and European futures as a slew of weak economic data from the world’s largest economy offered a fresh reminder about the impcat of the coronavirus. The dollar extended gains. Shares from Sydney to Seoul retreated following overnight losses on Wall Street. Contracts on the S&P 500 slipped 1% at one point in Asia trading, after the benchmark sank about 2% on Wednesday. Earnings reports showed the extent of the virus impact -- Goldman Sachs Group Inc.’s investment portfolio took a hit, while Bank of America Corp. and Citigroup Inc. followed rivals in setting aside billions for loan losses. Treasuries held their gains and oil steadied near its lowest in two decades. Futures on the the S&P 500 slid 0.8% as of 9:48 a.m. in Tokyo. The underlying gauge dropped 2.2% on Wednesday. Japan’s Topix index slid 1.6%. South Korea’s Kospi lost 1.3%. Australia’s S&P/ASX 200 Index sank 2%.    

• Oil Holds Near 18-Year Low as Demand Shock Outweighs Output Cuts.  

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

• Dalio Bond Warning, China Vast Task, India Contraction: Eco Day.

• U.S. Economic Data Show Deep Hit in March, Collapse in April.  

• Fed’s Bostic Says U.S. Businesses Face Survival Crisis in May. 

• Eight-Weeks of Relief Is Not Enough for Small Firms Facing Failure.

• Key Democrats Urge Mnuchin, Powell to Rescue Mortgage Servicers.

Wall Street Journal: 

• The Devastated Travel Industry, by the Numbers.

• Possible Chinese Nuclear Testing Stirs U.S. Concern.

• Joe Biden’s #MeToo Moment.

• China-Owned Smithfield to Close More Pork Plants.

• Small Businesses Opt to Close Despite Aid.

• Business Leaders Urge Trump to Dramatically Increase Virus Testing.

• How Coronavirus Is Eroding Privacy.

• New York City Could See Nearly 500,000 Job Losses From Coronavirus.

CNBC.com:

• The economic data is even worse than Wall Street feared: ‘The economy is clearly in ruins here’.

• Jim Cramer: 18 stock picks worth owning over the S&P 500.

• Coronavirus updates: United Airlines expects $5 billion in aid, US cases top 630,000.

• Small business loans top $296 billion and could reach the program’s limit by the end of Wednesday.

• Alphabet CEO tells employees the company will slow hiring and other investments.

• Drinking alcohol can make the coronavirus worse, the WHO says in recommending restricting access. 

• Stocks making the biggest moves after hours: Bed Bath & Beyond, JC Penney, United Airlines & more.

• JC Penney skips $12 million interest payment as coronavirus shutters stores.

Fox News:

• Sources believe coronavirus originated in Wuhan lab as part of China's efforts to compete with US.

• Newsom announces huge fund to give checks to illegal immigrants during virus.

MarketWatch.com:         

• Fannie Mae: Home sales will decline by 15% in 2020 due to coronavirus, but what will happen to property prices?

• The stock market has been on a roller coaster for 2 months — but the S&P 500 is down only 2% over 12 months. Here are the big winners.

• America needs to embrace socialism or let corporations fail, NYU prof says.

• Trump plans to unveil reopening guidelines as he says U.S. has passed peak of new coronavirus cases.

Zero Hedge:

• US Coronavirus Death Toll Passes 30,000 After Doubling In A Week: Live Updates.

• Trump Says US 'Thoroughly Examining' Possibility Virus Leaked From Wuhan Biolab.

• Houston: The Banks Have A Huge Problem.

• $3.5 Billion Has Flowed From U.S. Taxpayers To The World Health Organization Since 2010.

• US Mint Halts All Production Over Virus Fears As Gold & Silver Coin Demand Nears Record Highs.

• Google Subpoenaed For Hillary Clinton Emails Believed To Contain Backup To Records Scrubbed With "Bleachbit".

• Mexico Downgraded To Just One Notch Above Junk On Imminent "Severe Recession".

• US May Pay Shale Drillers Billions To Leave Oil In The Ground.

• Shocking New Documents Prove China Deliberately Withheld Critical Coronavirus Info.

• Treasury Cash Balance Soars To Record $959 Billion Following Bill Issuance Tsunami.

• Lockdown-Backlash Begins: Angry Crowd Surrounds Capitol, Demands Michigan Governor Reopen Economy.

• Japanese Holdings Of US Treasuries Hit Record Highs, China Big Buyer Too In Feb.

• Stocks Stumble At Critical Level After Economic Data Crashes At Record Pace.

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 -1.5% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 121.0 +7.5 basis points.

• China Sovereign CDS 43.25 +4.0 basis points.

• Bloomberg Emerging Markets Currency Index 58.39 -.14%.

• Euro Stoxx 50 futures -.43%.

• S&P 500 futures -.60%.

• NASDAQ 100 futures -.56%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ABT)/.61

• (BMI)/.37

• (BLK)/6.55

• (BK)/.91

• (HTLD)/.13

• (KEY)/.32

• (MS)/1.11

• (RAD)/-.15

• (TSM)/3.34

After the Close:

• (ISRG)/2.54

• (MRTN)/.24

• (SKX)/.51

• (WAL)/1.11

Economic Releases
8:30 am EST

• Housing Starts for March is estimated to fall to 1300K versus 1599K in Feb.

• Building Permits for March is estimated to fall to 1300K versus 1464K in Feb.

• Philly Fed Business Outlook for April is estimated to fall to -32.0 versus -12.7 in March.

• Initial Jobless Claims for last week are estimated to fall to 5462K versus 6606K the prior week. 

• Continuing Claims are estimated to rise to 13260K versus 7455K prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German CPI report, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory 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 commodity and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Global Recession Worries, Oil Decline, Technical Selling, Energy/Financial Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 41.0 +8.6%

• Euro/Yen Carry Return Index 121.70 -.36%

• Emerging Markets Currency Volatility(VXY) 11.33 +2.44%

• S&P 500 Implied Correlation 80.0 +8.0%

• ISE Sentiment Index 52.0 +6.0 points
  

• Total Put/Call 1.02 +3.0%

• NYSE Arms 1.54 -11.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 86.07 +4.5%
  

• America Energy Sector High-Yield CDS Index 1,100.0 +.19%

• European Financial Sector CDS Index 104.48 +11.2%

• Italian/German 10Y Yld Spread 235.0 +26.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 118.13 +.24%
  

• Emerging Market CDS Index 339.64 +8.69%
  

• iBoxx Offshore RMB China Corporate High Yield Index 159.99 +1.09%

• 2-Year Swap Spread 21.0 unch.

• TED Spread 110.0 +5.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 47.0 +.25 basis point
• MBS  5/10 Treasury Spread  127.0 +3.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.49 -1.02%
• 3-Month T-Bill Yield .13% -3.0 basis points

• Yield Curve 52.25 +1.0 basis point

• China Iron Ore Spot 82.50 USD/Metric Tonne -1.23%

• Citi US Economic Surprise Index -126.50 -42.4 points

• Citi Eurozone Economic Surprise Index -61.50 +.1 point

• Citi Emerging Markets Economic Surprise Index 13.10 +1.1 points

• 10-Year TIPS Spread 1.20 -9.0 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 -165 open in Japan 
• China A50 Futures: Indicating -203 open in China

• DAX Futures: Indicating +29 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/biotech/medical/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -4.5%

Sector Underperformers:

• 1) Coal -12.6% 2) Oil Service -6.8% 3) Homebuilding -6.3%

Stocks Falling on Unusual Volume: 

• UMBF, DOMO WFC, DX, GEO, MDC, URGN, LILA, USCR, CXO, WMS, HOG, HHC, JBL, RAD, WWD, BKU, DFS, FLOW, LEVI, PING, DOC, EAT, DDS, EPR, FND, AES, FANG, MIDD, PB, PH, TREE, IPG, NOVA, FITB, STOR, RTRX, KSS, FRT, CAKE, DIN, ERI, BBIO, OKE, APOG, JW/A, LPX, NNN, SPG, JWN, OXY, CATM, HESM, PVH, STWD, KTB, FOXF, CVNA and CHK

Stocks With Unusual Put Option Activity:

• 1) EWA 2) TCO 3) TGE 4) CZR 5) XLK

Stocks With Most Negative News Mentions:

• 1) JCP 2) BBBY 3) M 4) JPM 5) GILD

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -1.7%

Sector Outperformers:

• 1) Video Gaming +.6% 2) Healthcare Providers -.4% 3) Pharma -.6%

Stocks Rising on Unusual Volume:

• PTON, CATS, PLT and RDUS

Stocks With Unusual Call Option Activity:

• 1) TRIP 2) RSX 3) ZS 4) JCP 5) APC

Stocks With Most Positive News Mentions:

• 1) LYTS 2) NFLX 3) UNH 4) ABT 5) AMZN

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +20.7% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 6.8% of Issues Advancing, 92.3% Declining
• 3 New 52-Week Highs, 15 New Lows
• 10.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.4%
• Vix 41.6 +10.1%
• Total Put/Call .92 -7.1%
• TRIN/Arms 1.46 -14.1%