Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 58.25 +1.25 basis points.

• China Sovereign CDS 29.5 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 62.75 +.08%.
• Bloomberg Global Risk-On/Risk Off Index 2,692.0 +19.0 points.
• Volatility Index(VIX) futures 25.45 -1.75%.
• FTSE 100 futures +.08%.

• S&P 500 futures +.34%.

• NASDAQ 100 futures +.55%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AWI)/.67
• (BCO)/1.01
• (CBRL)/.75
• (HD)/2.37
• (LDOS)/1.61
• (M)/.12
• (MDT)/1.15
  

After the Close:

• (COG)/.20
• (DDS)/2.65
• (FLS)/.53
• (INTU)/.67
• (JAZZ)/4.20
• (MCFE)/.31
• (MELI)/.14
• (MYGN)/-.12
• (PXD)/.70
• (RRGB)/-1.08
• (SQ)/.24
• (SUM)/.17
• (TOL)/.46
  

Economic Releases

9:00 am EST

• The House Price Purchase Index for 4Q.
• The FHFA House Price Index MoM for Dec. is estimated to rise +1.0% versus a +1.0% gain in Nov.
• The S&P CoreLogic CS 20-City MoM for Dec. is estimated to rise +1.2% versus a +1.42% gain in Nov.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for Feb. is estimated to rise to 90.0 versus 89.3 in Jan.
• The Richmond Fed Manufacturing Index for Feb. is estimated to rise to 16.0 versus 14.0 in Jan. 

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell testimony to Senate, $2Y $60B T-Note auction, UK Unemployment report, Eurozone Inflation data, weekly US retail sales reports, Senate Intel Heading on SolarWinds hack, Keefe Bruyette Woods Payments Finance/FinTech Conference, UBS Chemicals Conference, (CG) investor day and the (SNAP) investor day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Mostly Lower into Final Hour on Rising Long-Term Rates, Valuation Concerns, Emerging Market Debt Angst, Tech/Biotech Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.1 +.4%
• Bloomberg Global Risk On/Risk Off Index 2,766.0 -112.0 points

• Euro/Yen Carry Return Index 132.17 +.03%

• Emerging Markets Currency Volatility(VXY) 10.03 +4.6%

• S&P 500 Implied Correlation 53.7 +5.0%

• ISE Sentiment Index 136.0 +20.0 points
  

• Total Put/Call .67 -11.8%

• NYSE Arms .84 -6.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.43 +2.0%
  

• US Energy High-Yield OAS 485.56 -.35%

• European Financial Sector CDS Index 59.75 +1.97%

• Italian/German 10Y Yld Spread 93.75 +.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 57.58 +.91%
  

• Emerging Market CDS Index 173.84 +3.92%
  

• iBoxx Offshore RMB China Corporate High Yield Index 185.92 +.07%

• 2-Year Swap Spread 9.75 +.25 basis point

• TED Spread 14.75 -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -.75 basis point
  
• MBS  5/10 Treasury Spread  81.5 +3.5 basis points
  
• IHS Markit CMBX BBB- 6 75.75 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.77 -.22%
• 3-Month T-Bill Yield .03% unch.
  

• Yield Curve 128.0 +4.0 basis points
  

• China Iron Ore Spot 170.6 USD/Metric Tonne +1.3%

• Citi US Economic Surprise Index 73.1 -5.9 points

• Citi Eurozone Economic Surprise Index 155.7 -.1 point
  

• Citi Emerging Markets Economic Surprise Index 63.7 -2.1 points

• 10-Year TIPS Spread 2.17 +3.0 basis points
• 100.0% chance of no change at April 28th meeting, 100.0% chance of no change at June 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +14 open in Japan 
• China A50 Futures: Indicating -14 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Mid-Cap Growth -1.9%

Sector Underperformers:

• 1) Digital Health -3.5% 2) Alt Energy -3.2% 3) Video Gaming -3.2%

Stocks Falling on Unusual Volume: 

• CURI, FROG, GHVI ,VEEV, TDS, SPKE, QDEL, VTRS and EBIX
  

Stocks With Unusual Put Option Activity:

• 1) STAY 2) SLM 3) KWEB 4) VNO 5) ASHR
  

Stocks With Most Negative News Mentions:

• 1) CLSK 2) BTBT 3) FUBO 4) JFU 5) TDS
  

Charts:

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

Bull Radar

 Style Outperformer:

• Small-Cap Value +1.6%

Sector Outperformers:

• 1) Oil Service +5.7% 2) Airlines +5.2% 3) Gold & Silver +4.9%

Stocks Rising on Unusual Volume:

• CTB, GT, VUZI, FRX, PBCT, CCIV, TRIP, ONDS, IPOF, FLR, RCL, TITN, EB, CCL, TMDX, CUK, NCLH, PFG, MXL, APPH, IMUX, KSS, SDGR, CLPT, OLN, PARR, DLTH, UAL, GBX, MAR, CDMO, PBFX, XPEL, ALK, RNA, FRTA, HVT, NWSA, MMP, ATKR, SAVA, HYLN, TEN, VAC, AACQ and MTB
  

Stocks With Unusual Call Option Activity:

• 1) PXD 2) NRG 3) PRU 4) GT 5) LQD

Stocks With Most Positive News Mentions:

• 1) GT 2) RCL 3) REI 4) TRIP 5) MTDR
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +27.4% Above 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 48.7% of Issues Advancing, 49.0% Declining
• 251 New 52-Week Highs, 7 New Lows
• 84.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.1% 
• Bloomberg Global Risk-On/Risk-Off Index 2,683.0 -193.0 points
• Vix 23.2 +5.1%
• Total Put/Call .63 -17.1%
• TRIN/Arms .76 -15.6%

Monday Watch

Today's Headlines

Bloomberg:

• U.K. Plans Business Tax Hike to Pay for Covid, Sunday Times Says.  
• Taiwan Sounds Warning on Currency as Exports Soar on Chip Demand.    
• Alibaba, Pinduoduo Join Fight Against Looming China Food Crisis.
  
• Bond Yields Rise; Stocks Up Amid Vaccine Optimism: Markets Wrap.
• Mideast Stocks Gain as Inoculations Calm Yield Fears: Inside EM. 
• Oil Advances as Markets Assess Texas Return Before OPEC+ Meet.
• Inflation Angst Is About to Rewrite the Stock Market Playbook.  
• U.S. Deaths Near 500,000; Australia Starts Shots: Virus Update.
• Surging U.S. Yields Loom Over Emerging Markets Beholden to Fed.
• Powell May Be Dovish in Congress Debut of Biden Era: Eco Week.  
• Biden’s Economic Legacy at Stake With Next Package Taking Shape.  
• Bill Gates Says Social-Media Bans Aren’t Answer to Divisiveness.  
• Chip Crisis Flummoxes Congress in a World Where U.S. Output Lags.  
• Teen Use, Mental Health Spur Talk of Pot Curbs.  
• Bubble Warnings Go Unheeded as Everyone Is a Buyer in Stocks.

Wall Street Journal:

• Bond Selloff Prompts Rethink by Stock Investors.
• Blue-Collar Jobs Boom in Pandemic.
• GameStop Craze Puts Holders of Retail ETF on Wild Ride.
• Biden’s Art of the Iran Concession.
• Big Labor May Save New York From AOC’s Socialism.
• U.S. Report Allows Russian Pipeline Project to Proceed, for Now.
• Activist Investors Seek Kohl’s Board Takeover.
• A Stock-Trading Dupe Is Born Every Minute.
• The Non-Covid Spending Blowout.
• The Money Boom Is Already Here.

Fox News:

• Dems' $2T coronavirus bailout bill a job killer, GOP House budget panel leader says.
• Pence declines CPAC invitation amid reports of 'bitterness' toward Trump.
• Gina Carano speaks out about her firing from 'The Mandalorian'.

CNBC:

• South Africa Covid variant detected for the first time in NY patient: Cuomo.
• Clorox making 1.5 million canisters of wipes per day to meet Covid demand, CEO says.
• ‘Explosion of economic activity’ may put inflation fears in check. Here’s why.

Zero Hedge: 

• Michael Burry Warns Weimar Hyperinflation Is Coming.
• Remember When Fauci Called Ebola Quarantines "Draconian", Warned Of "Unintended Consequences". 
• 'Watch Your Back': Cuomo Accused Of "Gangster" Threats Against "Flood" Of People.
• Stunning Levels Of Air Toxins Found In New York's Subway System.
• FAA Orders Emergency Inspections Of Boeing 777s After United Engine Failure; Japan Grounds 777 Fleet.
• California Nurses Sponsor Bill Mandating Free Healthcare For Everyone.
• "There Will Be Fear" - ARK Invest's Cathie Wood Warns Of Stock Market Correction.
• Dem Rep. Ro Khanna: 'We Don't Want' Small Businesses That Can't Pay $15 Minimum Wage.
• White House Says HFT Tax "Worth Studying" After GameStop Debacle.
• Are Yields About To Blast-Off: Here Are The 3 Things To Watch.
• "Morally Grotesque" - Whistleblower At Smith College Resigns Over 'Reverse-Racism'.
• Just As COVID Vaccine Found To Be 99% Effective In Preventing Death, Japan Discovers New, More Contagious Strain.
• The Next Commodity Supercycle.
• "Two Weeks That Changed The World": A Goldman Post-Mortem On "The Squeeze".
• Supermarket Calls Cops On Disabled Man For Not Wearing Mask, Tries to Make Him Wear Yellow Sticker.
• Somalia Is Headed Towards Another Tragic Collapse Despite Billions In US Funding.
• NATO Chief Says 'Rise Of China A Defining Issue' For The Alliance.
• Greenwald: Congress Escalates Pressure On Tech Giants To Censor More, Threatening The First Amendment.
• Meet The Columbia Professor Who Says He Does Heroin For "Work-Life Balance".
• The Trustees Have Failed.
• The High Cost Of Using The Minimum Wage As A Form Of Welfare.
• 92% Of NYC Restaurants Unable To Pay Rent In December, Study Finds.

MarketWatch.com:         

• Opinion: Inflation is rising and so are investors’ fears about stocks.
  

NewsMax:

• Newt Gingrich: 'Nobody' Can Challenge Trump's Hold on GOP.
• Allen West: Biden's Racial Justice Vaccine Remark 'Racist'.
• Gordon Chang: Chinese 'Don't Respect' President Biden.  
• Stephen Moore: Biden Energy 'Pipe Dream' Will 'Bankrupt' Us.

TheGatewayPundit.com:

• Biden Ends President Trump’s ‘America First’ Policies in a Speech to the G7 From an Unknown Location Filmed at an Unknown Time.
• INSANE: Louisiana Secretary of State About to Hand Over $100 Million in Voting Machine Purchase – Dominion Is Reportedly In the Running.
• Psaki Repeatedly Refuses to Condemn Cuomo’s Actions That Led to the Deaths of Thousands of Elderly New York Nursing Home Residents (VIDEO).
• Colorado’s 2020 Election Results Make No Sense – No Way Biden Received Half a Million More Votes than Obama, Hillary or Trump. No Way!
• Joe Biden Ends Trump Program that Targeted Sex Offenders in the US Illegally (Video).
• Despite Reports by Dishonest ‘Fact Checkers’ – January 6th Was NOT an ‘Armed Insurrection’ – Just More Lies.
• Mitch McConnell Thinks You’re Stupid – Is Fundraising Off of Trump’s Name.
• Electric Customers in North Texas Stuck with Electric Bills as High as $17,000 Following Cold Snap.
• Democrats Push Bill that Forces All States to Count Ballots Received 10 Days After an Election.

The Epoch Times:

• Lockdowns Continue in China Despite Beijing’s Claims of No New COVID-19 Cases.
• CCP Withheld Pandemic-Relevant Data From WHO, Leaked Documents Reveal.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 57.0 -.25 basis point.
• China Sovereign CDS 28.75 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 62.91 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 2,932.0 +57.0 points.
• Volatility Index(VIX) futures 24.75 -.20%. 
• Euro Stoxx 50 futures unch.
• S&P 500 futures +.15%.
• NASDAQ 100 futures +.25%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CTB)/.92
• (DISCA)/.72
• (DISH)/.89
• (KFY)/.51
• (RCL)/-5.19
  

After the Close:

• (BCC)/1.08
• (IR)/.45
• (MRO)/-.20
• (OXY)/-.58
• (PANW)/1.43
• (TREX)/.36
• (WMB)/.28
  

Economic Releases

8:30 am EST

• The Chicago Fed National Activity Index for Jan.

10:00 am EST

• The Leading Index for Jan. is estimated to rise +.3% versus a +.3% gain in Dec. 

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for Feb.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bowman speaking, German IFO Index and the SVB Leerink Healthcare Conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the week.