Stocks Reversing Slightly Lower into Final Hour on Global Recession Fears, Oil Decline, Profit-Taking, Tech/Healthcare Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 33.1 -.48%

• Euro/Yen Carry Return Index 120.13 -.28%

• Emerging Markets Currency Volatility(VXY) 11.9 -1.5%

• S&P 500 Implied Correlation 69.7 -.85%

• ISE Sentiment Index 76.0 +4.0 points

• Total Put/Call .92 -12.38%

• NYSE Arms .69 +2.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.22 -2.25%
  

• America Energy Sector High-Yield CDS Index 882.0 unch.

• European Financial Sector CDS Index 100.73 -1.58%

• Italian/German 10Y Yld Spread 219.75 -1.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 119.50 -1.78%
  

• Emerging Market CDS Index 362.0 -1.17%
  

• iBoxx Offshore RMB China Corporate High Yield Index 164.0 -.35%

• 2-Year Swap Spread 14.5 -1.0 basis point

• TED Spread 79.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap 18.0 -4.25 basis points
• MBS  5/10 Treasury Spread  120.0 -3.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.0 +.48%
• 3-Month T-Bill Yield .10% -1.0 basis point

• Yield Curve 44.0 +3.25 basis points

• China Iron Ore Spot 81.35 USD/Metric Tonne +.81%

• Citi US Economic Surprise Index -105.30 -1.6 points

• Citi Eurozone Economic Surprise Index -207.10 +6.8 points

• Citi Emerging Markets Economic Surprise Index 5.1 +.7 point

• 10-Year TIPS Spread 1.14 -3.0 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 +294 open in Japan 
• China A50 Futures: Indicating -70 open in China

• DAX Futures: Indicating -31 open in Germany

Portfolio:

• Lower: On losses in my biotech/tech/medical sector longs emerging market shorts

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

• Market Exposure: Moved to 25% Net Long

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +42.2% Above 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 71.6% of Issues Advancing, 26.7% Declining
• 30 New 52-Week Highs, 4 New Lows
• 12.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.6%
• Vix 33.4 +.15%
• Total Put/Call .98 -6.7%
• TRIN/Arms .81 +19.1%

Tuesday Watch

Evening Headlines

Bloomberg:               

• Debt Monetization Creeps Closer in Asia, Reshaping Bond Markets.

• Rich Asian Families Tighten Belts, While Others Seek Bargains.

• Vaccine Could Potentially Be Available Later This Year, Coalition Says.  

• China’s Hit Video Site Serves Teens Anime With a Side of Marx.

• Global Cases Pass 3 Million; U.S. to Expand Tests: Virus Update.  

• Coronavirus Lingers in Air of Crowded Spaces, New Study Finds. 

• Asia Stocks to Follow U.S. Higher; Oil Below $13. Asian stocks looked set for modest gains after U.S. stocks climbed to a six-week high amid moves toward re-opening a number of major economies. Crude oil prices held most of their sharp losses from Monday. Futures pointed higher in Japan, Australia and Hong Kong after the S&P 500 Index closed at its highest since March 10. S&P 500 futures dipped at the open. West Texas oil futures in New York held below $13 a barrel amid a glut of crude and selling by the biggest oil exchange-traded-fund. U.S. and European yields rose, while the dollar sank on Monday. S&P 500 futures fell 0.2% as of 7:01 a.m. in Tokyo. The S&P 500 advanced 1.4% at the close of trade in New York. Nikkei 225 futures rose 0.5%. Australia’s S&P/ASX 200 Index contracts ticked up 0.1%. Hong Kong’s Hang Seng Index futures earlier climbed 0.5%.  

• U.S. Oil Producers Begin Storing Crude in Strategic Reserve.  

• Oil Hangs On Near $13 as ETF Selloff Exacerbates Glut Concerns.

• White House Strategy Envisions Tests Reaching 2% of Public.  

• Goldman Says Narrow Breadth in S&P 500 a Bad Sign for Stocks.

• President Trump Suggests Schools May Be Among First to Reopen.

• Americans on Cusp of Meat Shortage With Food Chain Breaking Down.

Wall Street Journal:

• The Fed Is Changing What It Means to Be a Central Bank.

• States Move to Ease Lockdowns as Global Cases Top 3 Million.

• The Secret Group of Scientists and Billionaires Pushing a Manhattan Project for Covid-19.

• The Century of Bioweapons.

• European Hospitals Hit Hard by Coronavirus Fear a Resurgence.

• Apple Delays Mass Production of 2020 Flagship iPhones.

• The Consumer Trends Emerging From Coronavirus Lockdowns.

CNBC.com:

• The ‘new normal’ is a lot less investable as states reopen, Jim Cramer says.

• American will give passengers face masks and require them for flight attendants.

• Stocks making the biggest moves after hours: Keurig Dr Pepper, F5 Networks, Tesla and more.

Fox News:

• Crickets from Dem as campaign denies sex-assault allegation against presumptive WH nominee. 

• State declares end date to stay-at-home order; businesses to reopen in phases.

Zero Hedge:

• Western Spy Agencies Investigating Wuhan Scientist Highlighted By Zero Hedge In January.

• Pelosi Pitches Universal Basic Income To Cope With Pandemic.

• The Fed Has Gone Nuts... And It Can Get Worse.

• "We Ran Out Of Room": Newspaper Prints 21 Pages Of COVID Death Notices In One Day.

• Small Business Bailout Demand So High, SBA Portal Crashes 4 Minutes After Second Round Launch.

• UPS Drones To Deliver CVS Meds To Florida Retirement Community.

• This Is A Power-Grab The Likes Of Which We Haven't Seen Since 9/11.

• California Gov Threatens 'Lockdown Crackdown' As Thousands Crowd SoCal Beaches: Live Updates.

• Platts: 5 Commodity Charts To Watch This Week.

• Here's Every State's Plan For Lifting The Lockdown.

• Gundlach Opens A New Short At 2,863, Says Market Could "Easily" Take Out March Lows.

• AG Barr Sics Federal Prosecutors On States With 'Unconstitutional' Lockdowns.

• Small Caps Panic-Bid On Massive Short-Squeeze As Crude Crashes... Again.

Business Insider:  

• Just 4% of US money managers have a bearish outlook for stocks in 2021, new poll finds.

• GOLDMAN SACHS: Global oil storage could be maxed out in just 3 weeks, driving 'substantial volatility'.

• Amazon employees say they're scared to go to work, but they're not alone — here are 8 big companies facing worker criticism over their coronavirus safety response.

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 unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 123.75 -2.75 basis points.

• China Sovereign CDS 48.75 -2.5 basis points.

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

• FTSE 100 futures +.47%.

• S&P 500 futures -.05%.

• NASDAQ 100 futures -.02%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (MMM)/2.01

• (AB)/.59

• (BP)/.04

• (CRI)/.15

• (CAT)/1.67

• (GLW)/.19

• (CMI)/2.18

• (DHI)/1.10

• (FLR)/.25

• (HOG)/.55

• (MLM)/.54

• (MRK)/1.34

• (NVS)/1.38

• (NUE)/.95

• (OMC)/1.15

• (PEP)/1.03

• (PFE)/.71

• (PII)/.50

• (ROK)/1.80

• (SIRI)/.05

• (LUV)/-.27

• (TROW)/1.82

• (UPS)/1.24

• (ZBRA)/2.64

After the Close:

• (AMD)/.18

• (AKAM)/1.16

• (GOOG)/10.75

• (BXP)/1.78

• (BYD)/.07

• (CHRW)/.69

• (CERN)/.70

• (COHR)/.53

• (F)/-.06

• (IRBT)/-.42

• (JNPR)/.25

• (KBR)/.37

• (LSCC)/.14

• (MXIM)/.56

• (MDLZ)/.66

• (SBUX)/.32

• (WERN)/.35

• (YUMC)/-.19

Economic Releases
8:30 am EST

• Advance Goods Trade Balance for March is estimated at -$55.0B versus -$59.9B in Feb.

• Wholesale Inventories for March is estimated to fall -.4% versus a -.7% decline in Feb.

• Retail Inventories MoM for March is estimated to rise +.5% versus a -.3% decline in Feb.
  

9:00 am EST

• The S&P CoreLogic CS 20-City MoM for Feb. is estimated to rise +.3% versus a +.3% gain in Jan.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for April is estimated to fall to 87.9 versus 120.0 in March. 

• The Richmond Fed Manufacturing Index for April is estimated to fall to -42 versus 2 in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Australia CPI report and the weekly US retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by financial and commodity 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.