Stocks Slightly Higher into Afternoon on US Economic Optimism, Stable Long-Term Rates, Dovish Fed Commentary, Tech/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.6 -3.1%
• Bloomberg Global Risk On/Risk Off Index 3,150.0 +25.0 points

• Euro/Yen Carry Return Index 134.82 +.06%

• Emerging Markets Currency Volatility(VXY) 10.7 -.3%

• S&P 500 Implied Correlation 49.1 -.22%

• ISE Sentiment Index 136.0 +14.0 points
  

• Total Put/Call .77 +14.9%

• NYSE Arms .89 -8.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.95 +.65%
  

• US Energy High-Yield OAS 458.08 -.25%

• European Financial Sector CDS Index 58.90 +1.2%

• Italian/German 10Y Yld Spread 101.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 67.12 +3.9%
  

• Emerging Market CDS Index 178.46 +2.6%
  

• iBoxx Offshore RMB China Corporate High Yield Index 189.22 +.10%

• 2-Year Swap Spread 13.5 -.25 basis point

• TED Spread 19.0 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 unch.
  
• MBS  5/10 Treasury Spread  71.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 73.5 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.60 unch.
• 3-Month T-Bill Yield .01% unch.
  

• Yield Curve 150.0 -2.0 basis points
  

• China Iron Ore Spot 163.55 USD/Metric Tonne +.36%

• Citi US Economic Surprise Index 38.70 -.4 point

• Citi Eurozone Economic Surprise Index 170.50 +3.8 points
  

• Citi Emerging Markets Economic Surprise Index 25.60 +.1 point

• 10-Year TIPS Spread 2.34 +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 -35 open in Japan 
• China A50 Futures: Indicating -147 open in China

• DAX Futures: Indicating +37 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Growth -1.3%

Sector Underperformers:

• 1) Alt Energy -4.0% 2) Gaming -2.1% 3) Gold & Silver -1.4%

Stocks Falling on Unusual Volume: 

• TMDX, IONS, MUDS, APR, GBOX, OM, CONN, PLBY, RMO and FGEN
  

Stocks With Unusual Put Option Activity:

• 1) FANG 2) DUST 3) MDLZ 4) NCLH 5) NLY
  

Stocks With Most Negative News Mentions:

• 1) FGEN 2) PLUG 3) VERX 4) RIDE 5) CTVA
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.2%

Sector Outperformers:

• 1) Shipping +3.7% 2) Oil Service +.8% 3) Restaurants +.6%

Stocks Rising on Unusual Volume:

• OUST, FREQ, BHVN, GLSI, AGC, INTZ, KTB, ANF, IDCC, FNKO, NVST, TREE, JOAN, PCT, SGH, ADTN, SNAP, LPI, SQ, MATX, LB, VUZI, ACAD, NUAN, IBRX, MSGE, PRFT, NUAN and CMG
  

Stocks With Unusual Call Option Activity:

• 1) ODT 2) DUST 3) IO 4) COG 5) ANF

Stocks With Most Positive News Mentions:

• 1) BHVN 2) LAZ 3) ANF 4) LB 5) SGH
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -18.8% Below 100-Day Average 
• 5 Sectors Rising, 6 Sectors Declining
• 40.6% of Issues Advancing, 55.4% Declining
• 156 New 52-Week Highs, 6 New Lows
• 90.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.2%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,188.0 +65.0 points
• Vix 17.4 -4.0%
• Total Put/Call .75 +11.9%
• TRIN/Arms 1.04 +6.2%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 64.5 +1.25 basis points.

• China Sovereign CDS 33.5 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 60.63 +.32%.
• Bloomberg Global Risk-On/Risk Off Index 3,157.0 -18.0 points.
• Volatility Index(VIX) futures 21.55 +.27%.
• FTSE 100 futures +.36%.

• S&P 500 futures +.1%.

• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MSM)/1.03
• (SMPL)/.23
• (RPM)/.30
  

After the Close:

• (RGP)/.03
• (JEF)/.95
  

Economic Releases

8:30 am EST

• The Trade Deficit for Feb. is estimated to widen to -$70.5B versus -$68.2B in Jan.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,638,000 barrels versus a -876,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -747,910 barrels versus a -1,735,000 barrel decline the prior week. Distillate inventories are estimated to rise by +645,910 barrels versus a +2,542,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.85% versus a +2.3% gain prior.

2:00 pm EST

• March 17 FOMC Meeting Minutes.
  

3:00 pm EST

• Consumer Credit for Feb. is estimated to rise to $2.8B versus -$1.315B in Jan.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China trade balance report, UK trade balance report, weekly MBA Mortgage Applications report, Wells Fargo Future Mobility Conference, (COST) March sales results, (CCL) 1Q update and the (LUMN) analyst day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Slightly Higher into Final Hour on US Economic Optimism, Lower Long-Term Rates, Oil Gain, Consumer Discretionary/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.0 +.5%
• Bloomberg Global Risk On/Risk Off Index 3,150.0 -25.0 points

• Euro/Yen Carry Return Index 134.76 +.14%

• Emerging Markets Currency Volatility(VXY) 10.7 -1.0%

• S&P 500 Implied Correlation 50.6 +3.2%

• ISE Sentiment Index 122.0 +2.0 points
  

• Total Put/Call .63 -8.7%

• NYSE Arms .90 -23.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.45 +.44%
  

• US Energy High-Yield OAS 460.97 +.24%

• European Financial Sector CDS Index 58.17 +.10%

• Italian/German 10Y Yld Spread 101.0 +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 64.58 +2.16%
  

• Emerging Market CDS Index 174.0 -1.25%
  

• iBoxx Offshore RMB China Corporate High Yield Index 189.0 +.02%

• 2-Year Swap Spread 13.75 unch.

• TED Spread 19.25 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 +1.25 basis points
  
• MBS  5/10 Treasury Spread  70.0 +.25 basis point
  
• IHS Markit CMBX BBB- 6 73.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.60 +.28%
• 3-Month T-Bill Yield .01% -1.0 basis point
  

• Yield Curve 152.0 -1.0 basis point
  

• China Iron Ore Spot 163.20 USD/Metric Tonne +.96%

• Citi US Economic Surprise Index 39.10 -1.5 points

• Citi Eurozone Economic Surprise Index 166.70 -3.2 points
  

• Citi Emerging Markets Economic Surprise Index 25.50 -.4 point

• 10-Year TIPS Spread 2.33 -3.0 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 -6 open in Japan 
• China A50 Futures: Indicating -53 open in China

• DAX Futures: Indicating -4 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long