Stocks Surging into Afternoon on US Economic Optimism, Stable Long-Term Rates, Technical Buying, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.3 +5.7%
• Bloomberg Global Risk On/Risk Off Index 3,150.0 +8.0 points

• Euro/Yen Carry Return Index 134.54 -.06%

• Emerging Markets Currency Volatility(VXY) 10.9 +.65%

• S&P 500 Implied Correlation 48.3 -3.3%

• ISE Sentiment Index 120.0 +16.0 points
  

• Total Put/Call .69 -1.43%

• NYSE Arms 1.19 -33.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.15 +.78%
  

• US Energy High-Yield OAS 459.52 -2.97%

• European Financial Sector CDS Index 58.08 +.25%

• Italian/German 10Y Yld Spread 96.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 63.21 -.61%
  

• Emerging Market CDS Index 176.65 -1.56%
  

• iBoxx Offshore RMB China Corporate High Yield Index 189.0 +.05%

• 2-Year Swap Spread 13.75 +.5 basis point

• TED Spread 18.75 -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.75 -1.5 basis points
  
• MBS  5/10 Treasury Spread  69.75 -1.25 basis points
  
• IHS Markit CMBX BBB- 6 73.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.42 +.33%
• 3-Month T-Bill Yield .02% +1.0 basis point
  

• Yield Curve 153.0 -1.0 basis point
  

• China Iron Ore Spot 160.30 USD/Metric Tonne -.27%

• Citi US Economic Surprise Index 40.60 +4.1 points

• Citi Eurozone Economic Surprise Index 169.90 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index 25.90 +.3 point

• 10-Year TIPS Spread 2.36 -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 +81 open in Japan 
• China A50 Futures: Indicating -51 open in China

• DAX Futures: Indicating +6 open in Germany

Portfolio:

• Higher: On gains in my tech/medical/industrial/bioetch sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running -24.5% Below 100-Day Average 
• 10 Sectors Rising, 1 Sector Declining
• 61.7% of Issues Advancing, 35.0% Declining
• 251 New 52-Week Highs, 10 New Lows
• 89.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.5%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,158.0 +13.0 points
• Vix 17.8 +2.8%
• Total Put/Call .62 -11.4%
• TRIN/Arms .97 -45.8%

Monday Watch

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 63.75 unch.
• China Sovereign CDS 32.75 unch.
• Bloomberg Emerging Markets Currency Index 60.19 -.05%.
• Bloomberg Global Risk-On/Risk Off Index 3,092.0 -52.0 points.
• Volatility Index(VIX) futures 21.57 -2.1%. 
• Euro Stoxx 50 futures n/a.
• S&P 500 futures +.57%.
• NASDAQ 100 futures +.27%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• None of note
  

Economic Releases

10:00 am EST

• The ISM Services Index for March is estimated to rise to 58.5 versus 55.5 in Feb.
• Factory Orders for Feb. is estimated to fall -.5% versus a +2.6% gain in Jan.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Consumer Confidence Index and the (F) US sales conference call could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by technology 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 100% net long heading into the week.

Friday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

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

• China Sovereign CDS 32.75 -2.0 basis points.

• Bloomberg Emerging Markets Currency Index 60.31 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,106.0 +35.0 points.
• Volatility Index(VIX) futures 21.75 -1.29%.
• FTSE 100 futures n/a.

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.21%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for March is estimated at 650K versus 379K in Feb.
• The Unemployment Rate for March is estimated at 6.0% versus 6.2% in Feb.
• Average Hourly Earnings MoM for March is estimated to rise +.1% versus a +.2% gain in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Manufacturing PMI could also impact global trading today.

US Equity Market Hours

• Closed
  

Stocks Surging into Afternoon on US Economic Optimism, Lower Long-Term Rates, Oil Gain, Tech/Commodity Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.1 -6.5%
• Bloomberg Global Risk On/Risk Off Index 3,039.0 +128.0 points

• Euro/Yen Carry Return Index 134.70 +.27%

• Emerging Markets Currency Volatility(VXY) 10.85 -1.3%

• S&P 500 Implied Correlation 50.4 -2.9%

• ISE Sentiment Index 101.0 -4.0 points
  

• Total Put/Call .66 -10.8%

• NYSE Arms 1.65 +1.23%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.70 -4.8%
  

• US Energy High-Yield OAS 474.97 -.29%

• European Financial Sector CDS Index 57.92 -3.2%

• Italian/German 10Y Yld Spread 96.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 63.64 -.61%
  

• Emerging Market CDS Index 179.42 -3.39%
  

• iBoxx Offshore RMB China Corporate High Yield Index 188.87 +.02%

• 2-Year Swap Spread 13.25 -.25 basis point

• TED Spread 18.25 -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.25 +1.25 basis points
  
• MBS  5/10 Treasury Spread  72.25 unch.
  
• IHS Markit CMBX BBB- 6 72.75 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.30 +.16%
• 3-Month T-Bill Yield .01% -1.0 basis point
  

• Yield Curve 158.0 -1.0 basis point
  

• China Iron Ore Spot 157.20 USD/Metric Tonne -.21%

• Citi US Economic Surprise Index 36.50 +8.4 points

• Citi Eurozone Economic Surprise Index 172.30 -.7 point
  

• Citi Emerging Markets Economic Surprise Index 25.60 -3.3 points

• 10-Year TIPS Spread 2.36 -1.0 basis point
• 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 +257 open in Japan 
• China A50 Futures: Indicating +37 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Value +.7%

Sector Underperformers:

• 1) Steel -.6% 2) Utilities -.4% 3) Healthcare Providers -.1%

Stocks Falling on Unusual Volume: 

• TLS, KMX, USCR, BTAI, EBS and MVIS
  

Stocks With Unusual Put Option Activity:

• 1) STZ 2) KMX 3) GILD 4) DISH 5) KMB
  

Stocks With Most Negative News Mentions:

• 1) UI 2) FUV 3) XL 4) PLUG 5) VRM
  

Charts:

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