Tuesday Watch

Evening Headlines

Bloomberg:       

• Fearing Big Election Loss, China Goes on Offensive in Hong Kong.  

• Beijing Pays the Price for the Slow Pace of Economic Reform.  

• China Creditor Squeeze Prompts Slowdown in Record Bond Defaults.

• Virgin Australia Collapses as Virus Wipes Out Global Air Travel.

• U.S. Infections Slow; Virgin Australia Collapses: Virus Update.

• Asian Stocks Set to Drop After Historic Oil Move. Asian stocks looked set to follow their U.S. counterparts lower, with investors on edge as oil futures plunged to unprecedented levels and earnings season continued. Futures declined in Japan, Australia and Hong Kong. S&P 500 futures edged higher at the open in Asia after U.S. stocks fell from six-week highs. West Texas crude futures expiring Tuesday turned negative for the first time, primarily because the end of the May contract forces physical receipt at a time when storage capacity is low. June prices fell below $22 a barrel. Treasuries gained, with 10-year yields dipping more than three basis points to below 0.61%. The dollar strengthened and gold pushed higher. S&P 500 futures rose 0.2% as of 7:10 a.m. in Tokyo. The S&P 500 Index fell 1.8%. Futures on the Nikkei 225 were down 1.8% in Singapore. Australia’s S&P/ASX 200 Index futures fell 1%. Hong Kong’s Hang Seng Index contracts lost 0.8%. 

• Oil Spirals Below Zero in ‘Devastating Day’ for Global Industry.

• Crude’s Monster Meltdown in Three Charts.

• Trump Eyes Saudi Oil Import Ban, SPR Fill as Prices Go Negative.  

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

• Oil Below Zero, Remittance Risk, Beijing Pays Price: Eco Day.  

• White House Tells Federal Workers to Prepare to Return to Office.  

• Fauci Tells Protesters No Recovery If Virus Not ‘Under Control’.  

• GM, Ford Credit Arms May Lose Billions on Car-Price Plunge.  

• Americans Are Poisoning Themselves in Their Rush to Fight Virus.  

• U.S. Travel Group Sees Lost Sales Of $520 Billion by Year-End.  

• Subprime Car Buyers Skip Loan Payments in Sign of Trouble Ahead.

Wall Street Journal: 

• Businesses Strive to Reopen From Coronavirus Shutdown.

• Care to Store Some Oil?

• Facebook Puts Limits on Protest Organizers.

• The Coronavirus Hits the Global South.

• States Burn Through Cash for Unemployment Payments.

• In Race for Business Loans, Winning Hinged on Where Firms Bank.

• The Critical Variable in Keeping Coronavirus in Check.

• Boards Reset Executive Pay in Market Rout.

CNBC.com:

• Stocks making the biggest moves after hours: IBM, JM Smucker, United Airlines and more.

• Dow drops more than 500 points to start the week after historic oil plunge.

• Coronavirus live updates: Georgia governor says some businesses can reopen, California town to test every resident.

• Coronavirus will hit market for 18 to 24 months, long-term bull predicts.

• Oil market is ‘emblematic’ of everything wrong with the economy, Jim Cramer says.

• The plunge in oil prices is the last thing Boeing and Airbus need right now.

• Amazon warehouse workers plan nationwide protest this week to demand coronavirus protections.

• Coronavirus antibody testing shows LA County outbreak is up to 55 times bigger than reported cases.

Fox News:

• China stunningly calls for end to blame game as lawsuits over virus grow.

• This state seen as a new coronavirus hot spot as cases surge.

MarketWatch.com:            

• Why the oil market just crashed into negative territory — 4 things investors need to know.  

• Neiman Marcus is likely just the start: Analysts expect 100,000 stores to close by 2025.

Zero Hedge:

• Here Is The Full Explanation Behind Today's Unprecedented Negative Oil Price.

• Here's The Next Problem: Where Do 100 Million Oil Barrels Get Delivered... And What Happens Next Month?

• Central Banks Have Pumped An Annualized $23.4 Trillion Into The Financial System.

• Exposing Harvard's Chinese Agent Charles Lieber's "Virus Transmitters".

• Something Impossible Just Happened: A CLO Failed Its AAA Overcollateralization Test.

• Did Mark Zuckerberg Just Expose Big-Tech's Real Endgame? Ousting Trump.

• Oil Producers Will Pay You $54/Barrel To Take South Texas Sour Off Their Hands.

• Illinois Senate Democrats Seek Massive Federal Bailout for State, Going Far Beyond Coronavirus Impact.

• Small Business Owners Sue Wells Fargo, JPMorgan Over Virus Loan Debacle.

• IBM Reports Lowest Revenue This Century And Grotesque EPS Fudge; Pulls Guidance But Keeps Dividend.

• "Very Ugly Setup" - As Unemployment Claims Rise, Missed Mortgage Payments Soar.

• COVID-19 'Immunity Passports' Stoke 'Grave Concerns'.

• Georgia Will Become First State In The US To Reopen: Live Updates.

• History In The Making: Oil Settles At Negative $37.63 Per Barrel.

• The Market Is Breaking... Everywhere.

Business Insider:  

• RESTAURANT APOCALYPSE: 8 million restaurant workers are now unemployed as the industry braces for $240 billion in losses. 

• Americans, including a plurality of Republicans, oppose the anti-lockdown protests taking place across the country. 

• Traders piled $1.6 billion into an oil ETF last week — right before prices went negative for the first time in history.

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 -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 117.75 +1.0 basis point.

• China Sovereign CDS 46.25 +2.0 basis points.

• Bloomberg Emerging Markets Currency Index 58.20 +.01%.

• Euro Stoxx 50 futures -.80%.

• S&P 500 futures +.69%.

• NASDAQ 100 futures +.67%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (KO)/.45

• (CMA)/1.24

• (EMR)/.75

• (FITB)/.46

• (FLR)/.30

• (HCA)/2.76

• (JBLU)/-.51

• (LMT)/5.84

• (MAN)/.81

• (PCAR)/1.21

• (PM)/1.13

• (SAP)/.94

• (SNA)/2.71

• (TRV)/2.83

After the Close:

• (CP)/4.06

• (CMG)/2.66

• (CB)/2.58

• (IBKR)/.68

• (NFLX)/1.64

• (SNAP)/-.08

• (TER)/.87

• (TXN)/.99

Economic Releases
10:00 am EST

• Existing Home Sales for March is estimated to fall to 5.25M versus 5.77M in Feb.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The US weekly retail sales reports, German ZEW Index, (SCHW) business update and the (BP) energy outlook 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 consumer discretionary shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Global Recession Fears, Oil Crash, European/Emerging Markets/US High-Yield Debt Angst, Homebuilding/Transport Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above-Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 41.6 +9.1%

• Euro/Yen Carry Return Index 121.28 +.05%

• Emerging Markets Currency Volatility(VXY) 11.4 -.09%

• S&P 500 Implied Correlation 76.1 +7.6%

• ISE Sentiment Index 81.0 +8.0 points
  

• Total Put/Call .88 -3.3%

• NYSE Arms 1.18 +57.33%

Credit Investor Angst:

• North American Investment Grade CDS Index 92.41 +5.8%
  

• America Energy Sector High-Yield CDS Index 1,368.0 +3.02%

• European Financial Sector CDS Index 107.82 +6.44%

• Italian/German 10Y Yld Spread 238.75 +12.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 116.99 +.21%
  

• Emerging Market CDS Index 346.20 +1.12%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.14 n/a

• 2-Year Swap Spread 22.50 +1.0 basis point

• TED Spread 102.0 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap 45.50 +.5 basis point
• MBS  5/10 Treasury Spread  136.0 +7.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.21 -.42%
• 3-Month T-Bill Yield .07% -4.0 basis points

• Yield Curve 43.0 -1.0 basis point

• China Iron Ore Spot 83.50 USD/Metric Tonne -.49%

• Citi US Economic Surprise Index -133.10 -4.1 points

• Citi Eurozone Economic Surprise Index -61.70 -.3 point

• Citi Emerging Markets Economic Surprise Index -8.30 -2.7 points

• 10-Year TIPS Spread .94 -7.0 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 -264 open in Japan 
• China A50 Futures: Indicating -140 open in China

• DAX Futures: Indicating -130 open in Germany

Portfolio:

• Higher: On gains in my biotech/medical sector longs, index hedges and emerging market shorts

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value -2.4%

Sector Underperformers:

• 1) Gaming -5.7% 2) Energy -3.9% 3) Homebuilding -3.7%

Stocks Falling on Unusual Volume: 

• WYND, MSA, ELY, BXMT, HXL, ALLY, STOR, C, SPG, GVA, UAL, IBTX, AAL, KW, WDC, SAVE, PTON, BA, TCBI, MAIN, OKE, KSS, HPP, LVS, NCLH, USCR, SPR, MDP, FIX, MTZ, SUPN, DDS, PXD, UCTT, STWD, PVH, CUB, TWOU, CLR, OXY, CLR and DIN

Stocks With Unusual Put Option Activity:

• 1) COUP 2) SCHW 3) OIL 4) EWC 5) HES

Stocks With Most Negative News Mentions:

• 1) SONG 2) MDP 3) WYNN 4) UAL 5) BAC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.3%

Sector Outperformers:

• 1) Biotech +2.0% 2) Gold & Silver +2.0% 3) Pharma +1.1%

Stocks Rising on Unusual Volume:

• NVAX, EXEL, RAD, FLIR, MRNA, CATS, SAGE, CODI, OSTK, FUN, PLMR, CUE, KRMD, SHAK, NET and CAKE

Stocks With Unusual Call Option Activity:

• 1) OPK 2) KWEB 3) VBIV 4) DPZ 5) SHAK

Stocks With Most Positive News Mentions:

• 1) EXEL 2) RAD 3) CODX 4) DD 5) SGEN

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +11.0% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 34.9% of Issues Advancing, 63.4% Declining
• 12 New 52-Week Highs, 12 New Lows
• 10.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.9%
• Vix 40.0 +4.9%
• Total Put/Call .82 -9.9%
• TRIN/Arms .79 +5.3%