Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 63.75 +.25 basis point.

• China Sovereign CDS 34.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 59.71 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 3,032.0 +32.0 points.
• Volatility Index(VIX) futures 21.15 +.56%.
• FTSE 100 futures -.09%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AYI)/1.71
• (CONN)/.24
• (WBA)/1.12
  

After the Close:

• (PLAY)/-1.25
• (GES)/.56
• (MU)/.93
  

Economic Releases

8:15 am EST

• The ADP Employment Change for March is estimated to rise to 550K versus 117K in Feb.
  

9:45 am EST

• The MNI Chicago PMI for March is estimated to rise to 61.0 versus 59.5 in Feb.

10:00 am EST

• Pending Home Sales MoM for Feb. is estimated to fall -3.0% versus a -2.8% decline in Jan.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -928,820 barrels versus a +1,912,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +413,820 barrels versus a +204,000 barrel gain the prior week. Distillate inventories are estimated to rise by +789,090 barrels versus a +3,806,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +1.42% versus a +5.5% gain prior.

Upcoming Splits

• (SHW) 3-for-1
  

Other Potential Market Movers

• The German Unemployment Rate, weekly MBA Mortgage Applications report and the (KR) investor update could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology 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 day.

Stocks Lower into Afternoon on Higher Long-Term Rates, Dollar Strength, Oil Decline, Tech/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 20.1 -3.1%
• Bloomberg Global Risk On/Risk Off Index 2,968.0 +155.0 points

• Euro/Yen Carry Return Index 133.68 +.04%

• Emerging Markets Currency Volatility(VXY) 11.3 +1.4%

• S&P 500 Implied Correlation 49.7 -3.0%

• ISE Sentiment Index 144.0 +23.1 points
  

• Total Put/Call .75 -12.8%

• NYSE Arms .75 -29.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 56.37 +.1%
  

• US Energy High-Yield OAS 480.32 -.20%

• European Financial Sector CDS Index 61.54 -.78%

• Italian/German 10Y Yld Spread 97.0 +.75 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 63.79 +.06%
  

• Emerging Market CDS Index 191.66 +2.97%
  

• iBoxx Offshore RMB China Corporate High Yield Index 188.75 -.02%

• 2-Year Swap Spread 13.25 +.75 basis point

• TED Spread 19.75 +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -1.0 basis point
  
• MBS  5/10 Treasury Spread  74.5 -1.25 basis points
  
• IHS Markit CMBX BBB- 6 73.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.72 -.36%
• 3-Month T-Bill Yield .01% unch.
  

• Yield Curve 160.0 +8.0 basis points
  

• China Iron Ore Spot 161.05 USD/Metric Tonne +1.1%

• Citi US Economic Surprise Index 28.30 +7.4 points

• Citi Eurozone Economic Surprise Index 182.80 +19.7 points
  

• Citi Emerging Markets Economic Surprise Index 27.0 -2.6 points

• 10-Year TIPS Spread 2.35 -2.0 basis points
• 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 -22 open in Japan 
• China A50 Futures: Indicating -232 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/medical sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Growth -.5%

Sector Underperformers:

• 1) Gold & Silver -2.5% 2) Utilities -.9% 3) Pharma -.8%

Stocks Falling on Unusual Volume: 

• PCT, FMTX, BFLY, RCUS, DNMR and PCVX
  

Stocks With Unusual Put Option Activity:

• 1) NLSN 2) ARMK 3) KMX 4) SFM 5) CAR
  

Stocks With Most Negative News Mentions:

• 1) GOEV 2) AKUS 3) ASND 4) CNX 5) TROW
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.6%

Sector Outperformers:

• 1) Alt Energy +4.6% 2) Airlines +3.8% 3) Gaming +2.3%

Stocks Rising on Unusual Volume:

• SOL, SWAV, SI, LNTH, SEER, REVG, ASO, X, DISCA, CRS, ANGO, RAVN, GVA, QTRX, CELH, RH, USCR, STRL, HGEN, CLF, ICAD, CHPT, RARE, VIAC, DLTH, PLBY, JBLU, KYMR, SIVB, LE, FUN, LC, BECN, PAR, NAVI, TNDM and VITL
  

Stocks With Unusual Call Option Activity:

• 1) KTOS 2) SEAC 3) PARR 4) VIAC 5) DISCA

Stocks With Most Positive News Mentions:

• 1) BNTX 2) VIPS 3) AAL 4) ANGO 5) AMRN
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -18.5% Below 100-Day Average 
• 4 Sectors Rising, 7 Sector Declining
• 54.5% of Issues Advancing, 42.9% Declining
• 79 New 52-Week Highs, 25 New Lows
• 87.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.4%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,929.0 +116.0 points
• Vix 20.7 -.4%
• Total Put/Call .74 -14.0%
• TRIN/Arms .69 -35.5%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 63.5 -.5 basis point.

• China Sovereign CDS 34.25 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 59.89 -.09%.
• Bloomberg Global Risk-On/Risk Off Index 2,826.0 +15.0 points.
• Volatility Index(VIX) futures 22.0 -.01%.
• FTSE 100 futures +.32%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.10%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ANGO)/-.02
• (FDS)/2.74
• (MKC).59
  

After the Close:

• (BB)/.03
• (CHWY)/-.10
• (LULU)/2.49
• (PVH)/-.23
  

Economic Releases

8:30 am EST

• The FHFA House Price Index MoM for Jan. is estimated to rise +1.2% versus a +1.1% gain in Dec.
• The S&P CoreLogic CS 20-City MoM for Jan. is estimated to rise +1.2% versus a +1.25% gain in Dec.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for March is estimated to rise to 96.7 versus 91.3 in Feb.

Upcoming Splits

• (SHW) 3-for-1
  

Other Potential Market Movers

• The Fed's Quarles speaking, China Manufacturing PMI report, German Inflation Data report, Eurozone Economic Sentiment, weekly US retail sales reports, BofA Automotive Summit and the Scotiabank Telecom/Media/Tech Conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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