Thursday Watch

Evening Headlines

Bloomberg:          

• South Korea’s Economy Shrinks the Most Since 2008.

• Oil Collapse to Worsen China’s Deflation, Open Path for PBOC.  

• Global Container Shipments Set to Fall 30% in Next Few Months.  

• Distress Deepens in Indian Villages, Worsening Economic Pain.

• U.S. Cases Slow; South Korea’s GDP Shrinks: Virus Update. 

• Asia Stocks Set for Modest Gains; Oil Up From Lows. Asian stocks looked set to follow their U.S. peers higher as investors took some comfort from earnings reports and signs the coronavirus outbreak is easing. Oil jumped and Treasuries fell. Futures rose in Japan, Hong Kong and Australia. Contracts on the S&P 500 Index dipped after the gauge rebounded from its worst sell-off in three weeks amid quarterly results. Chipotle Mexican Grill rose on sales that topped estimates, while Texas Instruments advanced on solid res
  ults. Treasury Secretary Steven Mnuchin said he anticipates most of the economy will restart by the end of August. House lawmakers on Thursday are set to pass another round of aid. Futures on the S&P 500 slipped 0.1% as of 7:26 a.m. in Tokyo. The gauge rose 2.3% on Wednesday. Futures on Japan’s Nikkei 225 gained 0.9%. Hang Seng futures earlier advanced 0.1%. Futures on Australia’s S&P/ASX 200 Index gained 0.9%.    

• More Aid to Come, ECB Accepting Junk, Pressure on PBOC: Eco Day.   

• Oil Extends Recovery From Furious Selloff as Glut Worries Linger.

• Lockdown Lifestyles Are Reshaping the Future of Oil Demand.

• U.S. Probes Whether Traders Profited Off Tips on Russia at OPEC+  

• Zoom Daily Users Surge to 300 Million Despite Privacy Woes.  

• Gulf Widens Between States Over When to End Coronavirus Lockdown.

• Hedge Funds Suffer Largest Quarterly Withdrawals Since 2009.

• Self-Employed Get Raw Deal in U.S. Multitrillion-Dollar Rescues.  

• Apple iPhones, iPads Vulnerable to Hackers by Flaws in Mail App.  

• New Study Shows Nearly 9 in 10 Covid-19 Patients on Ventilators Don’t Make It.   

• SL Green Cuts Guidance With Virus Hampering NYC Rent Collection.

Wall Street Journal:

• Victoria’s Secret Buyer Seeks to Cancel Takeover After Coronavirus.

• Health Chief’s Early Missteps Set Back Coronavirus Response.

• A Coronavirus Vaccine: Faster, Please.

• Mnuchin Says ‘We Need to Spend What It Takes’ to Overcome Crisis.

• Hospitals Aim to Resume Procedures Postponed by Virus.

• In Georgia, a Divided View on Reopening Businesses.

CNBC.com:

• US officials prepare for ‘two viruses’ next fall: coronavirus and the flu.

• Stocks making the biggest moves after hours: CSX, Las Vegas Sands, Netgear and more.

• Massive layoffs are likely coming to state and local governments.

• Another 4.3 million workers expected to have filed unemployment claims.

Fox News:

• McConnell balks at states trying to 'take advantage' of virus.

• What are the potential long-term health impacts of coronavirus?

• Trump 'disagrees strongly' with Georgia gov's plan to reopen some businesses.

MarketWatch.com:          

• About 150 years of oil-price history in one chart illustrates crude’s spectacular plunge below $0 a barrel.

• S&P 500 companies spent $7 trillion on buybacks and dividends and have ‘been rewarded’ by coronavirus bailouts, says Social Capital CEO.

Zero Hedge:

• Kyle Bass: "The Saudis Are Sending Us A 50 Million Barrel Oil Bomb"

• "There's No Liquidity" - Mortgage Lenders Abandon "No Brainer" Best Credit Risk Borrowers.

• Japanese PMI Collapses To Record Low, Signals 10% Crash In GDP.

• Trump Says He "Strongly Disagrees" With Gov Kemp's Decision To Reopen Georgia.

• Here's Why 2/3rds Of US Oil & Gas Companies May Not Exist A Year From Now.

• What Rebound? Hedge Funds Have Been Selling For 8 Of Past 9 Days As "Global HF Heavyweights Remain Bearish".

• US Blasts "Bullying Behavior" As China Rattles Sabre In South China Sea.

• Skynet Is Near - Google Scientists Create Artificial Intelligence That Evolves On Its Own.

• Caves, Cars, & Clogged Pipelines - Oil Traders Turn To "Oddball Storage Locations" As Demand Hits 30-Year Lows.

• More Than 10,000 American Nursing Home Residents Have Died Of COVID-19: Live Updates.

• New York Released - Then Retracted - A New Policy Asking Paramedics To Just Let Patients Without A Pulse Die.

• Air Force Preparing For 'Cyclical' Coronavirus, Top General Warns.

• Round 2: Chamath Explains Why Corporate America Is "Incompetent" & Fed Stimulus Is "Dangerous" In Epic 7-Minute CNBC Interview.

• Harvard Announces They Won't Take Coronavirus Funds After All.

• Tech Companies Are Rushing To Develop AI-Based Social-Distancing "Enforcement" Tools.

• Bonds Dumped As Gold, Stocks, Crude, Crypto, & The Dollar Jump.

Business Insider:  

• 'We are the new Disneyland:' Essential workers in Walmart, Costco, and Target are frustrated by bored customers browsing stores for nonessential purchases amid the pandemic.

• Struggling video game retailer GameStop has argued it's 'essential.' Now it's preparing to fully re-open some stores even as most of the US remains in quarantine.

•   Los Angeles will start publicly sharing a real-time list of restaurants in the city with reported coronavirus cases.

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 +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 123.25 +5.5 basis points.

• China Sovereign CDS 48.5 -3.25 basis points.

• Bloomberg Emerging Markets Currency Index 57.74 -.03%.

• Euro Stoxx 50 futures -.18%.

• S&P 500 futures -.11%.

• NASDAQ 100 futures -.24%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (APD)/2.08

• (ADS)/3.84

• (BX)/.54

• (CTXS)/1.18

• (DPZ)/2.35

• (LLY)/1.48

• (HSY)/1.71

• (NVR)/45.61

• (ODFL)/1.12

• (POOL)/.64

• (PHM)/.70 

• (RS)/2.10

• (TSCO)/.70

• (UNP)/1.90

After the Close:

• (OZK)/.61

• (COF)/1.27

• (ETFC)/.92

• (EW)/1.23

• (FE)/.62

• (IEX)/1.30

• (INTC)/1.26

• (RHI)/.76

• (SKX)/.44

• (TPH)/.17

Economic Releases
8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 4500K versus 5245K prior.

• Continuing Claims are estimated to rise to 17000K versus 11976K the prior week.
  

9:45 am EST

• Preliminary Markit US Manufacturing PMI for April is estimated to fall to 35.0 versus 48.5 in March.

• Preliminary Markit US Services PMI for April is estimated to fall to 30.0 versus 39.8 in March.
  

10:00 am EST

• New Home Sales for March is estimated to fall to 642K versus 765K in Feb.
  

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for April is estimated to fall to -37 versus -17 in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Services PMI report, weekly Bloomberg Consumer Comfort Index, Bloomberg Economic Expectations Index for April, weekly EIA natural gas inventory report and the (UL) trading statement could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

Stocks Surging into Final Hour on Global Stimulus Hopes, Diminishing Coronavirus Fears, Oil Bounce, Tech/Energy Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 41.6 -8.4%

• Euro/Yen Carry Return Index 120.86 -.43%

• Emerging Markets Currency Volatility(VXY) 11.74 +.77%

• S&P 500 Implied Correlation 76.30 -6.3%

• ISE Sentiment Index 137.0 +85.0 points
  

• Total Put/Call .98 -10.9%

• NYSE Arms 1.15 +.88%

Credit Investor Angst:

• North American Investment Grade CDS Index 94.80 -2.5%
  

• America Energy Sector High-Yield CDS Index 1,115.0 -15.8%

• European Financial Sector CDS Index 107.91 -6.68%

• Italian/German 10Y Yld Spread 248.5 -14.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 124.16 +1.82%
  

• Emerging Market CDS Index 353.09 -2.65%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.24 +.08%

• 2-Year Swap Spread 19.75 -.75 basis point

• TED Spread 101.0 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 36.0 -2.5 basis points
• MBS  5/10 Treasury Spread  130.0 -9.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.77 -.09%
• 3-Month T-Bill Yield .10% +2.0 basis points

• Yield Curve 36.0 -4.0 basis points

• China Iron Ore Spot 82.50 USD/Metric Tonne +.34%

• Citi US Economic Surprise Index -133.10 unch.

• Citi Eurozone Economic Surprise Index -31.90 -.4 point

• Citi Emerging Markets Economic Surprise Index -7.80 -1.1 points

• 10-Year TIPS Spread 1.06 +10.0 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 +212 open in Japan 
• China A50 Futures: Indicating -20 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +.5%

Sector Underperformers:

• 1) Airlines -3.5% 2) Gaming -.3% 3) I-Banks +.4%

Stocks Falling on Unusual Volume: 

• SPG, TSC, ALLY, ELY, CACC, WRB, SEAS, DAL, WWW, EPR, CB, VVI, AAL, KSS, SAVE, IBKR, UAL, TBK, BIIB, RLI, DDS and KRMD

Stocks With Unusual Put Option Activity:

• 1)  PCG 2) CAR 3) OIL 4) BIIB 5) LRCX

Stocks With Most Negative News Mentions:

• 1) EVR 2) CB 3) TSN 4) DAL 5) SUM

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.7%

Sector Outperformers:

• 1) Gold & Silver +6.0% 2) Restaurants +5.6% 3) Semis +5.0%

Stocks Rising on Unusual Volume:

• SNAP, HCSG, INO, USNA, CMG, MANH, PGNY, CUE, WTFC, WPP, LH and VAR

Stocks With Unusual Call Option Activity:

• 1) AM 2) WLL 3) SNAP 4) OIL 5) DPZ

Stocks With Most Positive News Mentions:

• 1) SNAP 2) ATIF 3) FB 4) TMO 5) DGX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +12.6% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 75.7% of Issues Advancing, 22.9% Declining
• 10 New 52-Week Highs, 13 New Lows
• 8.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.6%
• Vix 42.6 -6.1%
• Total Put/Call 1.02 -7.3%
• TRIN/Arms 1.35 +18.4%