Stocks Higher into Afternoon on Lower Long-Term Rates, Dovish Fed Commentary, Sector Rotation, Tech/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.2 -8.6%
• Bloomberg Global Risk On/Risk Off Index 2,893.0 +37.0 points

• Euro/Yen Carry Return Index 134.3 +.2%

• Emerging Markets Currency Volatility(VXY) 10.4 +.9%

• S&P 500 Implied Correlation 51.6 +11.1%

• ISE Sentiment Index 117.0 -9.0 point
  

• Total Put/Call .71 -15.5%

• NYSE Arms 1.6 +12.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.3 +9.6% (new series)
  

• US Energy High-Yield OAS 492.25 -.25%

• European Financial Sector CDS Index 64.16 +12.4%

• Italian/German 10Y Yld Spread 98.0 +1.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 67.5 +14.6%
  

• Emerging Market CDS Index 167.27 -7.6%
  

• iBoxx Offshore RMB China Corporate High Yield Index 188.51 +.03%

• 2-Year Swap Spread 11.5 +.75 basis point

• TED Spread 20.0 +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -2.75 basis points
  
• MBS  5/10 Treasury Spread  81.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 74.25 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.25 +1.25%
• 3-Month T-Bill Yield .00% unch.
  

• Yield Curve 153.0 -2.0 basis points
  

• China Iron Ore Spot 154.25 USD/Metric Tonne +2.0%

• Citi US Economic Surprise Index 40.90 -.1 point

• Citi Eurozone Economic Surprise Index 87.1 -2.3 points
  

• Citi Emerging Markets Economic Surprise Index 33.0 -.9 point

• 10-Year TIPS Spread 2.32 +1.0 basis point
• 100.0% chance of no change at June 16th meeting, 100.0% chance of no change at Sept. 22nd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +61 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating +20 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -1.9%

Sector Underperformers:

• 1) Airlines -3.3% 2) Steel -2.5% 3) Banks -2.2%

Stocks Falling on Unusual Volume: 

• RC, BCRX, MTSI, NLS and GRPN
  

Stocks With Unusual Put Option Activity:

• 1) CLVS 2) HGEN 3) AEP 4) UA 5) COUP
  

Stocks With Most Negative News Mentions:

• 1) ELAN 2) VRA 3) RLX 4) AX 5) BGS
  

Charts:

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

Bull Radar

Style Outperformer:

• Lagrge-Cap Growth +1.6%

Sector Outperformers:

• 1) Semis +2.9% 2) Software +1.9% 3) Shipping +1.6%

Stocks Rising on Unusual Volume:

• CLPT, UPST, KSU, CVGI, CAL, CUB, BOX, ALEX, SNX, ATEC, AFIB and BSY
  

Stocks With Unusual Call Option Activity:

• 1) NLY 2) BIIB 3) MRKR 4) BOX 5) FLEX

Stocks With Most Positive News Mentions:

• 1) AMAT 2) DG 3) ZI 4) CTLT 5) PEP
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -17.3% Above 100-Day Average 
• 8 Sectors Rising, 3 Sectors Declining
• 42.7% of Issues Advancing, 54.3% Declining
• 71 New 52-Week Highs, 14 New Lows
• 88.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.1%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,862.0 +5.0 points
• Vix 20.2 -3.7%
• Total Put/Call .59 -29.8%
• TRIN/Arms 1.56 +10.0%

Monday Watch

Today's Headlines

Bloomberg:           

• Khamenei Says Iran Is in ‘No Hurry’ to Revive Nuclear Deal.
• China Still Has Room to Provide Liquidity to Economy: PBOC Chief.  
• EU’s Plodding Stirs ECB Concerns as U.S. Delivers Stimulus.
• Aramco Aims to Partner With China on Blue Hydrogen, CEO Says.  
• Porsche Makes a Play for Electric Animal Spirits.  
• Mideast Equities Drop Tracking Slump in Oil Prices: Inside EM.   
• Stocks Eye Steady Open; Dollar Up in Haven Trade: Markets Wrap.  
• Oil Resumes Decline in Asia After Ending Ugly Week With a Bounce. 
• Oil Is Still on a Bumpy Path to Recovery Despite Price Swerve.  
• Fed’s Barkin Sees Strong Economy With Some Price Pressures.
• U.S. Deaths Slow; EU Rejects Donating Vaccines: Virus Update.  
• NFTs Mushroom Into Billion-Dollar Market With Help From Alchemy.  
• Stores That Defined American Malls Bet on a Freestanding Future.  
• Marijuana Salad Flap Hints at Legal Pitfalls: Cannabis Weekly.

Wall Street Journal:

• Covid-19 Vaccine Manufacturing in U.S. Races Ahead.
• Americans Are Ready to Travel. But Where Can They Go?
• Will We Be Ready if GPS Goes Down?
• Deconstruction, Identity and the Dying Art of Criticism.
• New Realtors Pile Into Hot Housing Market.
• U.S. Distillers Bitter Over 25% Tariffs Set to Double in June.
• The New Stock Influencers Have Huge—and Devoted—Followings.
• Stimulus Checks Leave U.S. Households Flush to Spend.
• A Fed With No Fear of Inflation Should Scare Investors.
• China’s Warning to Biden.

Barron's:

• Had bullish commentary on (LMT), (ELF), (SPLK) and (TSLA).
• Had bearish commentary on (MAXR) and (IRDM).

Fox News:

• Biden locks media out of border operation amid spiraling crisis – reporters look in from Mexico.
• BORDER CRISIS: First photo inside El Paso migrant center obtained by Fox News.
• Border Patrol makes unprecedented move at ground zero known for illegal crossers surge.

CNBC:  

• Brazil Covid variant detected in New York resident for the first time.
• How college students learned new ways to cheat during Covid.
• These 10 retailers are in expansion mode: Here’s who is opening new stores.
• Saudi Aramco profit slumps 44% after Covid-battered year, but maintains dividend.
• Biden’s closest advisors have ties to big business and Wall Street with some making millions.
• Top Wall Street analysts are unanimously bullish on these stocks.
• Vizio, best known for bargain TVs, wants IPO investors to focus on its high-growth ads business.

Zero Hedge: 

• What FBI Stats Really Reveal About Asian Hate Crimes.
• Former FDA Commissioner: "Costly" Social Distancing Mandate "Wasn't Based On Clear Science".
• Defiant US Soldiers Openly Questioning Why BLM Riots Weren't Treated Like Capitol 'Insurrection'.
• Canadian Pacific Buys Kansas City Southern For $25BN In Largest Deal Of 2021.
• Luongo: Capital Is Sensing "This Central Bank Impotency".
• Watch: UK Announces Vaccine "Certificates", Says They Are Not Vaccine Passports.
• Top NATO Scientist With High-Level Security Clearance Spied For Chinese Intelligence.
• The ECB's Financial Suttee.
• Brandon Smith: Is The Illegal-Immigration Crisis All About New COVID Lockdowns?
• Meet "Digit," A Humanoid Robot Testing Package Delivery From Curb To Doorstep.
• "A Threat To American Democracy" - Federal Judge Alleges Democrats Control Almost All Major News Outlets.
• America's Upside-Down Economy Just Took Another Bizarre Turn.
• The Great Donkification.
• Gross Profits For House Flippers Hits Record As Fed Turbocharges Real Estate Bubble.
• House Democrats Propose 4,350 Earmarks A Year Costing $13 Billion.
• Father Arrested After Continuing To Call His Child "She" Following Court-Ordered Gender-Transition Treatments.
• "Burn Your Masks!" Massive Anti-Lockdown Protests Rage Worldwide.
• Two-Thirds Of Manhattan White-Collar Workers Will Not Return To Office Full-Time, Survey Says.

MarketWatch.com:     

• Opinion: The Tesla bubble: Bets on electric cars and the rise of SPACs have led to a new version of the dot-com boom.  
• Opinion: How inflation’s bite makes bonds riskier than stocks. 
• The new normal of travel: 10 things that can seriously impact your next trip.

NewsMax:  

• Biden Spends $86 Million in Hotel Rooms for Illegal Aliens.
• Border Patrol Weighs Releasing Illegals Without Court Date.
• Lawmakers Describe 'Dire' Escalating Border Situation.
• K.T. McFarland: US Waking Up to Fact of China Cold War.
• Trump: We Handed Biden Secure Border, He Made It 'National Disaster'.
  

TheGatewayPundit.com:

• President Trump Slams Biden and ‘Pathetic, Clueless’ Homeland Security Sec. Mayorkas Over Border Chaos.
• ENTIRE Georgetown Basketball Team Kneels for National Anthem at NCAA Tourney — Then Get Spanked by 23 Points.
• Biden Is Housing COVID Contaminated Illegals in Facilities Built for Oil Employees – What Is the Real Cost of Biden’s Insane Policies?
• BREAKING: SWAT Team Moves In As Spring Breakers Commit Violence, Destroy Restaurants…City of Miami Beach Declares State of Emergency [VIDEO].
• China is the Greatest Existential Threat to the US – Biden’s Actions with Russia Were “Childish” – Former Secretary of State Mike Pompeo.
• “We’re Heading Towards 200,000 Illegal Border Crossers Per Month” – Jesse Watters on FOX News.
• Texas Governor Orders Investigation Into Joe Biden’s Filthy, Unsanitary Holding Camp for Migrant Minors After Massive Covid Outbreak.

The Epoch Times:

• Beijing Delicately Navigating Another Housing Bubble.
• US Government Should Further Limit Investments in China: Panel.
  
• Beijing Delicately Navigating Another Housing Bubble.

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 -1.25% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 58.75 -1.0 basis point.
• China Sovereign CDS 30.75 +1.75 basis points.
• Bloomberg Emerging Markets Currency Index 60.80 +.53%.
• Bloomberg Global Risk-On/Risk Off Index 2,794.0 -50.0 points.
• Volatility Index(VIX) futures 23.66 +1.48%. 
• Euro Stoxx 50 futures -.19%.
• S&P 500 futures +.15%.
• NASDAQ 100 futures +.11%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (GES)/.56
• (SNX)/1.57
  

Economic Releases

8:30 am EST

• The Chicago Fed National Activity Index for Feb. is estimated to rise to .72 versus .66 in Jan. 

10:00 am EST

• Existing Home Sales for Feb. is estimated to fall to 6.5M versus 6.69M in Jan.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Bowman speaking, Fed's Quarles speaking, Eurzone Current Account report, Simmons Energy Conference, BofA Energy/Utilities Conference and the Piper Sandler Energy Conference 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 commodity and industrial 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 week.

Today's Headlines

Bloomberg:           

• China and U.S. to Cooperate on Climate Change, Xinhua Says.  
• U.S. and China Must Decide What’s Next After Talks Clear Air.  
• China Reshuffles Central Bank’s Monetary Policy Committee.
• Australia May Review Quarantine Measures as More are Vaccinated.  
• U.K.’s Crisis Ground Zero Is Ready for Reconstruction: Eco Week.
  
• Summers Sees Worst U.S. Macroeconomic Policy in 40 Years.
• Miami Cracks Down; Report Suggests Wildlife Origin: Virus Update.
• Musk Says Tesla Would Be Shut Down If Cars Used for Spying.  
• Ghost of Horrific Treasury Auction Haunts Bond Market on Brink.  
• SEC Signals Tougher Line With Conoco, Occidental on Climate: FT.  
• Stellantis Delays Production of Trucks Amid Global Chip Shortage.  
• Wall Street Pros From Goldman to JPMorgan on New Inflation Era.
• Charting the Global Economy: Middle Class Ranks Shrank in 2020.

Wall Street Journal:

• Tokyo Olympics to Bar Spectators From Overseas.
• Elon Musk Says Tesla Won’t Share Data From Its Cars With China or U.S.
• To Buy a Home in the Pandemic, Relatives Team Up on Bids.
• Capitalism Is What Will Defeat Covid.
• Europe’s Gang That Couldn’t Shot Straight.
• Turkey’s Erdogan Ousts Central Bank Governor in Surprise Move.
• Satellite Internet Is Coming to a Backyard Near You.
  

CNBC:

• How Texas is luring big businesses and billionaires away from California.
• Boat shows are back and drawing big crowds amid robust demand.
• Charts show that Europe’s third coronavirus wave has begun.
• Brokerage app Webull seeing activity increase as stimulus checks roll out: CEO.
• The Fed could be a source of market volatility as Powell and others speak in the week ahead.
• Rate fears are getting the blame for recent stock weakness, but other factors are at play.

IG:

• Weekend Markets Trading Live.

MarketWatch.com:    

• Investors poured record $56.8 billion into stock-market funds as stimulus checks arrived.  
• Weekend reads: What’s hype and what’s real about EVs.  
• Why Goldman Sachs sees a ‘buying opportunity’ in oil’s recent selloff.

Fox News:

• Biden stumbles while climbing Air Force One stairs, WH official blames wind.
• Biden's White House fired staffers for past pot use, so is admitted weed user VP Harris next?
• Biden admin considering flying migrants to states near Canada border.
• Current aide becomes 8th woman to accuse gov of sex misconduct.   
• Biden’s stumbles – on policy and otherwise – have America’s enemies 'pouncing': ex-Trump adviser. 
• Federal judge issues blistering warning about New York Times, WaPo.
  

Newsmax:  

• New Yorker: Cuomo Joked He Wanted to 'Mount' Female Staffer Like a Dog.
  
• Rep. Pat Fallon to Newsmax TV: Biden Handing Border to Drug Cartels.
• Amid Border Surge, Confusion Reigns Over Biden Policies.
  

Zero Hedge:

• Why HR1 Threatens Election Integrity.
• UK Prepares Antitrust Probe Into Facebook.
• German Researchers Link AstraZeneca Jab To Rare Blood Clots.
• DARPA Wants Jetpack Soldiers On Modern Battlefield.
• Digital Trails: How The FBI Is Identifying, Tracking, & Rounding-Up Dissidents.
• People Are Snapping Up Virtual Land Like Hotcakes -- And Now There's A Fund.
• The Puppet Masters: Is There Really A Deep State?
• SecDef Austin Warns North Korea: US "Ready To Fight Tonight".
• "It's Pretty Windy Outside" - White House Blames 'Climate' For Biden's Biff On Air Force One Steps
• "Things Are Out Of Control" - There Is A Shortage Of Everything And Prices Are Soaring: What Happens Next
• BofA: The Uber-Dovish Fed Backfired And Vigilantes Are Now Bullying Powell Into YCC - Three Ways To Trade This.
• FBI Director Says Atlanta Massage Parlor Murder Spree "Does Not Appear To Be Racially Motivated" 
• 'That Stinks!': Brooklyn Art Director Sells Audio Of A Fart As An NFT For $85.
• Bill Gates Does Reddit AMA, Dodges Questions About Meetings With Jeffrey Epstein.
• More "COVID Suicides" Than COVID Deaths In Kids.
• "Girl Of The Week" - Current Aide Accuses Cuomo Of 'Ogling' Her Body, Gazing Down Her Shirt.
• Biden "Proud" As "Theatrical" Alaska Summit Ends In 'No Breakthroughs' With China.
• America's Worst Drug Crisis Ever Is Causing The Streets Of Many Cities To Look Like "Zombie Apocalypse" Has Arrived.
• 'Stimmy' Hangover? Stocks Sink As Fed Flubs, Bond Bull-Market Ends
  

TheGatewayPundit.com:

• FBI Director Wray Says Atlanta Massage Parlor Mass Shooting “Does Not Appear to be Racially Motivated” (AUDIO).
• Kamala Harris Awkwardly Cackles After Reporter Confronts Her on “Help is Here” Tour: If the Covid Bill is So Popular, Why is It Important to Go Out and Sell It? (VIDEO).
• Biden’s Foreign Policy Disaster in Alaska with China Was Worse than Initially Reported — With Video.
• Kamala Harris Takes Veiled Shot at Trump, Trashes America as a Racist and Xenophobic Country After Meeting with Asian Community in Georgia (VIDEO).
• Biden’s Military’s Number One Focus – Not China – Not Iran – But Promoting the Rights of LGBTQ Around the World.
• ‘The US Does Not Have the Qualification to Speak to China From a Position of Strength’ – China’s Top Diplomat Humiliates Biden’s Team on American Soil (VIDEO).
• BREAKING: Democrats Go FULL MARXIST! Rep. Jimmy Gomez (D-CA) Introduces Resolution to Expel Rep. Marjorie Taylor Greene (R-GA) from Congress.
• “He’s Not In Charge” – Steve Hilton Says Aloud What We’ve Known About Joe Biden for Months.
• LEFTIST INDOCTRINATION: Military Leaders Very “Concerned” that Troops Compare Jan. 6 to BLM Riots – Pushing for More Brainwashing to Train them on “Right from Wrong”.

The Epoch Times:

• Beijing Tightens Control Over Voice Software and Deepfake Technologies on Chinese Social Media Platforms.
• ‘Off-The-Charts Arrogant’: Lawmakers, Analysts Slam Chinese Diplomats’ Fiery Display at US-China Talks.

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).