Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 58.5 +.75 basis point.

• China Sovereign CDS 29.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 62.27 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 1,389.0 +13.0 points.
• Volatility Index(VIX) futures 26.4 +2.23%
• FTSE 100 futures -.48%.

• S&P 500 futures -.54%.

• NASDAQ 100 futures -.41%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (PAYX)/.66

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Nov. is estimated to rise +.6% versus a +1.3% gain in Oct.
• Durables Ex Transports for Nov. is estimated to rise +.5% versus a +1.3% gain in Oct. 
• Cap Goods Orders Non-Defense Ex Air for Nov. is estimated to rise +.6% versus a +.8% gain in Oct.
• Initial Jobless Claims for last week are estimated to fall to 880K versus 885K the prior week.
• Continuing Claims are estimated to rise to 5560K versus 5508K prior.
• Personal Income for Nov. is estimated to fall -.3% versus a -.7% decline in Oct.
• Personal Spending for Nov. is estimated to fall -.2% versus a +.5% gain in Oct.
• The PCE Core MoM for Nov. is estimated to rise +.1% versus unch. in Oct.
  

9:00 am EST

• The FHFA House Price Index MoM for Oct. is estimated to rise +.6% versus a +1.7% gain in Sept.

10:00 am EST

• New Home Sales for Nov. is estimated to fall to 995K versus 999K in Oct. 

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly MBA Mortgage Applications report and bank lending report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, weighed boosted by commodity and consumer 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.

Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 58.5 +.75 basis point.

• China Sovereign CDS 29.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 62.27 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 1,389.0 +13.0 points.
• Volatility Index(VIX) futures 26.4 +2.23%
• FTSE 100 futures -.48%.

• S&P 500 futures -.54%.

• NASDAQ 100 futures -.41%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (PAYX)/.66

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Nov. is estimated to rise +.6% versus a +1.3% gain in Oct.
• Durables Ex Transports for Nov. is estimated to rise +.5% versus a +1.3% gain in Oct. 
• Cap Goods Orders Non-Defense Ex Air for Nov. is estimated to rise +.6% versus a +.8% gain in Oct.
• Initial Jobless Claims for last week are estimated to fall to 880K versus 885K the prior week.
• Continuing Claims are estimated to rise to 5560K versus 5508K prior.
• Personal Income for Nov. is estimated to fall -.3% versus a -.7% decline in Oct.
• Personal Spending for Nov. is estimated to fall -.2% versus a +.5% gain in Oct.
• The PCE Core MoM for Nov. is estimated to rise +.1% versus unch. in Oct.
  

9:00 am EST

• The FHFA House Price Index MoM for Oct. is estimated to rise +.6% versus a +1.7% gain in Sept.

10:00 am EST

• New Home Sales for Nov. is estimated to fall to 995K versus 999K in Oct. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,899,560 barrels versus a -3,135,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +248,780 barrels versus a +1,020,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,538,890 barrels versus a +167,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.52% versus a -.8% decline prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly MBA Mortgage Applications report and bank lending report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, weighed boosted by commodity and consumer 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.

Stocks Slightly Lower into Afternoon on Virus Mutation/Shutdown Fears, Senate Control Worries, Oil Decline, Commodity/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.1 -4.2%
• Bloomberg Global Risk On/Risk Off Index 1,205.0 -34.0 points

• Euro/Yen Carry Return Index 130.37 -.37%

• Emerging Markets Currency Volatility(VXY) 10.5 +.38%

• S&P 500 Implied Correlation 49.2 +1.7%

• ISE Sentiment Index 106.0 +3.0 pionts
  

• Total Put/Call .59 -25.3%

• NYSE Arms 1.40 +28.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 55.67 +.82%
  

• US Energy High-Yield OAS 581.08 +.32%

• European Financial Sector CDS Index 64.21 +1.26%

• Italian/German 10Y Yld Spread 115.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 57.63 -1.08%
  

• Emerging Market CDS Index 162.01 -.67%
  

• iBoxx Offshore RMB China Corporate High Yield Index 183.48 -.16%

• 2-Year Swap Spread 8.75 +.25 basis point

• TED Spread 16.0 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -34.0 -5.75 basis points
  
• MBS  5/10 Treasury Spread  76.0 +2.5 basis points
  
• IHS Markit CMBX BBB- 6 72.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.30 -.48%
• 3-Month T-Bill Yield .07% -1.0 basis point
  

• Yield Curve 80.75 unch.
  

• China Iron Ore Spot 162.0 USD/Metric Tonne -7.2%

• Citi US Economic Surprise Index 65.2 -1.5 points

• Citi Eurozone Economic Surprise Index 200.40 -1.3 points
  

• Citi Emerging Markets Economic Surprise Index 70.3 -.6 point

• 10-Year TIPS Spread 1.94 -1.0 basis point
• 100.0% chance of no change at March 17th meeting, 100.0% chance of no change at April 28th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +109 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating -13 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.4%

Sector Underperformers:

• 1) Shipping -2.5% 2) Airlines -1.6% 3) Steel -1.6%

Stocks Falling on Unusual Volume: 

• DMYD, TSLA, BLI, USCR, LOB, MGTX, INAQ, MOS, RVP, RYTM, NCLH, SUMO, AVO, SNDX, RAD, LE, OSTK, KMX, NVAX and MRNA
  

Stocks With Unusual Put Option Activity:

• 1) MVIS 2) KMX 3) SPWR 4) EWJ 5) EMB
  

Stocks With Most Negative News Mentions:

• 1) CVGW 2) BRY 3) YY 4) CB 5) BSX
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.3%

Sector Outperformers:

• 1) Alt Energy +4.9% 2) Digital Health +2.3% 3) Networking +1.2%

Stocks Rising on Unusual Volume:

• SPWH, QS, RIOT, GME, IPV, VSTO, SGMO, SOL, ALVR, BLNK, FCEL, FUBO, LGVW, VCYT, IAC, SPRO, ROOT, MARA, NLS, THCB, CLSK, CDXS, MWK, SI, TCS, PTON, PRLB, INSG, SMPL, REAL, AKTS, LOAK, STPK, HRTX, LITE, MP, NVTA, NK, VLDR, CDAY, CLDR, OAC, DM, DBX, VEEV amd RMG
  

Stocks With Unusual Call Option Activity:

• 1) LITE 2) VSTO 3) URBN 4) GNPX 5) SPWH

Stocks With Most Positive News Mentions:

• 1) FUBO 2) PTON 3) TDOC 4) TMUS 5) RCII
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -8.8% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 46.0% of Issues Advancing, 51.4% Declining
• 247 New 52-Week Highs, 4 New Lows
• 84.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.5% 
• Bloomberg Global Risk-On/Risk-Off Index 1,188.0 -54.0 points
• Vix 24.5 -2.7%
• Total Put/Call .58 -26.6%
• TRIN/Arms 1.38 +26.6%