Stocks Rising into Final Hour on Global Stimulus Hopes, Oil Gain, Short-Covering, Retail/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 37.05 -10.5%

• Euro/Yen Carry Return Index 120.26 -.01%

• Emerging Markets Currency Volatility(VXY) 11.4 -2.4%

• S&P 500 Implied Correlation 76.15 -3.92%

• ISE Sentiment Index 71.0 -37.0 points
  

• Total Put/Call 1.08 +24.1%

• NYSE Arms 1.32 +54.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 92.82 -1.02%
  

• America Energy Sector High-Yield CDS Index 884.0 -34.3%

• European Financial Sector CDS Index 109.99 +5.62%

• Italian/German 10Y Yld Spread 231.25 -9.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 124.95 +1.03%
  

• Emerging Market CDS Index 367.61 +2.78%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.15 -.11%

• 2-Year Swap Spread 16.5 -1.0 basis point

• TED Spread 92.0 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 30.5 -5.5 basis points
• MBS  5/10 Treasury Spread  129.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.51 -.40%
• 3-Month T-Bill Yield .10% +2.0 basis points

• Yield Curve 37.0 -3.0 basis points

• China Iron Ore Spot 80.89 USD/Metric Tonne -.57%

• Citi US Economic Surprise Index -101.80 +31.5 points

• Citi Eurozone Economic Surprise Index -219.70 -17.5 points

• Citi Emerging Markets Economic Surprise Index -.2 +2.3 points

• 10-Year TIPS Spread 1.11 +6.0 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 +208 open in Japan 
• China A50 Futures: Indicating +38 open in China

• DAX Futures: Indicating +85 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +21.7% Above 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 40.5% of Issues Advancing, 57.0% Declining
• 8 New 52-Week Highs, 12 New Lows
• 10.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.8%
• Vix 39.5 -4.5%
• Total Put/Call .95 +9.2%
• TRIN/Arms 1.59 +84.9%

Friday Watch

Evening Headlines

Bloomberg:          

• U.K. Consumer Confidence at 12-Year Low in Virus Lockdown.

• Some Mexico Doctors Attacked with Bleach Over Virus Fears.

• U.S. House Passes Aid Bill; Japan May Extend Break: Virus Update. 

• Asian Stocks Set For Mixed Start; Crude Climbs. Asian stocks looked set for a mixed start to trading after a U.S. rally faltered on a report a leading experimental coronavirus drug performed poorly in a test. Oil climbed back above $16 a barrel. Futures dipped in Tokyo and rose in Hong Kong and Australia. S&P 500 contracts edged lower after the gauge erased a 1.6% gain in Thursday’s session to end little changed. Gilead Sciences Inc.’s antiviral drug remdesivir flopped in its first randomized clinical trial, the Financial Times reported, citing draft documents published accidentally by the World Health Organization. The drug company disputed that characterization. Treasuries edged higher and the dollar was mostly lower against its G-10 peers. Futures on the S&P 500 fell 0.2% as of 7:35 a.m. in Tokyo. The S&P 500 closed little changed on Thursday. Futures on Japan’s Nikkei 225 fell 0.4%. Hang Seng futures earlier rose 0.2%. Futures on Australia’s S&P/ASX 200 Index gained 0.2%.

• Oil Stabilizes at End of Week That Saw Historic Drop Below Zero.

• Oil for Less Than Nothing? Here’s How That Happened.  

• Your Evening Briefing.   

• Over 10% of CLOs Fail Collateral Tests, Putting Payouts at Risk. 

• Mnuchin Says U.S. Has No Plans for Mortgage Servicer Lifeline.

• Biggest Oil ETF ‘Almost Unanalyzable’ After Ditching Disclosure.

• Small Businesses Fear Fresh Loan Funding Won’t Be Nearly Enough.

• Farmers Are Starting to Destroy Their Pigs After Factories Close.

• Gilead Plunges After Report That Virus Drug Trial Was Unsuccessful.

• Coronavirus Dies Fastest Under Light, Warm and Humid Conditions.

• With ‘Virtually Zero’ Air Travel, Southwest Warns of Pay Risk.

• Amtrak Sees Ballooning Losses as Virus Slashes Ridership by 95%.  

• Hertz Taps Restructuring Advisers While Car Rentals Decline.

Wall Street Journal:

• Jobless Rolls Swell by 4.4 Million.

• Amazon Scooped Up Data From Its Own Sellers to Launch Competing Products.

• Stopping a Lawsuit Epidemic.

• Virus Outbreak Alters American Shopping Lists. 

• Grocers Hunt Meat as Coronavirus Hobbles Beef and Pork Plants. 

• China’s Medical-Goods Market Is ‘Wild West’. 

• Social Isolation’s High Physical and Psychological Toll.

CNBC.com:

• Intel shares drop on low Q2 guidance.

• Coronavirus live updates: California reports ‘deadliest day’ yet, global lockdowns ease.

• Trump says he may extend coronavirus social distancing guidelines to early summer.

• Tech companies pull back on hiring, flashing another grim warning sign for the economy.

• The FDA just approved Columbia’s Covid-19 plasma therapy study, backed by Amazon.

• Google to cut marketing budgets by as much as half, directors warned of hiring freezes.

• Stocks making the biggest moves after hours: Alphabet, E-Trade, People’s United Financial and more.

Fox News:

• Trump, White House officials suggest coronavirus is weakened by these environmental factors.

• Antibody study suggests just how many New Yorkers got coronavirus.

• State extends stay-at-home order through May, but with some tweaks.

MarketWatch.com:          

• Earnings are set for their biggest dive since late 2009 — and it gets worse from here.

• Intel stock falls after report says Apple plans to debut its own Mac chips in 2021.

• His fund returned 34% as oil prices crashed, now he warns ‘extreme weakness’ may be in store the next 4 to 6 weeks.

• Online sports-betting operator DraftKings to begin trading on the Nasdaq Friday.

Zero Hedge:

• Renowned Microbiologist Claims Wuhan Lab 'Did Absolutely Crazy Things' With Coronavirus.

• California Suffers Deadliest Day Of Coronavirus Outbreak With 115 Fatalities: Live Updates.

• Credit Card Companies Are Cutting Limits For Riskier Customers As Millions Of Jobs Evaporate.

• "Scan Your Code!": Dystopian Post-Lockdown 'Normal' In Wuhan Enforced By 'Anti-Virus Patrols'.

• US Intel Officials Believe Chinese Diplomats May Have Spread Fake Texts To Cause Social Unrest.

• IRGC Fires Back At Trump: Iran Will "Destroy" US Ships That Come Near.

• Rep. Shalala Admits Not Disclosing Stock Sales After Pelosi Appoints Her To Oversee Bailout Billions.

• Houses Passes New $484 Billion Coronavirus Stimulus Bill.

• "Pandemic Drones" To Fly In Connecticut, Hunting For CCOVID-Carriers.

• Rubio Demands Banks Explain If Certain Borrowers Favored For PPP Loans.

• Treasury Orders Public Companies To Repay PPP Loans Meant For Small Businesses.

• Stocks Inexplicably Close Red After Economy Loses Millions More Jobs.

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 -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 124.25 +1.0 basis point.

• China Sovereign CDS 51.75 +3.25 basis points.

• Bloomberg Emerging Markets Currency Index 57.71 -.06%.

• Euro Stoxx 50 futures -.83%.

• S&P 500 futures -.61%.

• NASDAQ 100 futures -.81%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AAL)/-2.28

• (AXP)/1.71

• (ALV)/.76

• (AN)/.72

• (B)/.50

• (FCX)/-.17

• (GNTX)/.36

• (GT)/-.05

• (SNY)/1.44

• (VZ)/1.22

After the Close:

• None of note

Economic Releases
8:30 am EST

• Durable Goods Orders for March is estimated to fall -12.0% versus a +1.2% gain in Feb.

• Durables Ex Transports for March is estimated to fall -6.3% versus a -.6% decline in Feb.

• Cap Goods Orders Non-Defense Ex Air for March is estimated to fall -6.7% versus a -.9% decline in Feb.
  

10:00 am EST

• Univ. of Mich. Consumer Sentiment for April is estimated to fall to 68.0 versus 71.0 in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone IFO Index and the (NRSGY) sales call could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Higher into Final Hour on Global Stimulus Hopes, Oil Surge, Short-Covering, Energy/Gaming Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 41.1 -2.1%

• Euro/Yen Carry Return Index 120.27 -.54%

• Emerging Markets Currency Volatility(VXY) 11.4 -2.4%

• S&P 500 Implied Correlation 77.6 +.75%

• ISE Sentiment Index 108.0 -29.0 points
  

• Total Put/Call .87 -4.4%

• NYSE Arms .78 -20.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 92.98 -2.6%
  

• America Energy Sector High-Yield CDS Index 1,320.0 +18.5%

• European Financial Sector CDS Index 10414 -3.5%

• Italian/German 10Y Yld Spread 241.0 -7.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 123.71 -.06%
  

• Emerging Market CDS Index 356.91 +.09%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.34 -.54%

• 2-Year Swap Spread 17.5 -2.25 basis points

• TED Spread 94.0 -7.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 30.5 -5.5 basis points
• MBS  5/10 Treasury Spread  128.0 -2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.80 +.07%
• 3-Month T-Bill Yield .08% -2.0 basis points

• Yield Curve 40.0 +4.0 basis points

• China Iron Ore Spot 81.42 USD/Metric Tonne -.1%

• Citi US Economic Surprise Index -133.30 -.2 point

• Citi Eurozone Economic Surprise Index -202.20 -170.3 point

• Citi Emerging Markets Economic Surprise Index -2.50 +5.3 points

• 10-Year TIPS Spread 1.05 -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 +26 open in Japan 
• China A50 Futures: Indicating -33 open in China

• DAX Futures: Indicating -105 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +41.2% Above 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 64.5% of Issues Advancing, 33.4% Declining
• 21 New 52-Week Highs, 16 New Lows
• 9.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.0%
• Vix 40.1 -4.5%
• Total Put/Call .85 -6.6%
• TRIN/Arms .76 -22.5%