Stocks Rising into Final Hour on US Economic Optimism, Sector Rotation, Technical Buying, Consumer Discretionary/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.8 -.7%
• Bloomberg Global Risk On/Risk Off Index 3,200.0 +49.0 points

• Euro/Yen Carry Return Index 134.90 +.25%

• Emerging Markets Currency Volatility(VXY) 10.5 -.38%

• S&P 500 Implied Correlation 49.1 +.7%

• ISE Sentiment Index 87.0 -31.0 points
  

• Total Put/Call .71 unch.

• NYSE Arms 1.45 -19.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.14 -.09%
  

• US Energy High-Yield OAS 453.78 -.67%

• European Financial Sector CDS Index 57.88 -.02%

• Italian/German 10Y Yld Spread 103.0 +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 70.92 +2.9%
  

• Emerging Market CDS Index 178.41 +.84%
  

• iBoxx Offshore RMB China Corporate High Yield Index 189.27 +.02%

• 2-Year Swap Spread 13.0 -.5 basis point

• TED Spread 18.0 -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 -.75 basis point
  
• MBS  5/10 Treasury Spread  67.0 -3.25 basis points
  
• IHS Markit CMBX BBB- 6 73.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.49 -.44%
• 3-Month T-Bill Yield .01% unch.
  

• Yield Curve 148.0 -3.0 basis points
  

• China Iron Ore Spot 165.50 USD/Metric Tonne -.35%

• Citi US Economic Surprise Index 37.20 -.6 point

• Citi Eurozone Economic Surprise Index 150.40 -19.0 points
  

• Citi Emerging Markets Economic Surprise Index 25.20 +.3 point

• 10-Year TIPS Spread 2.33 unch.
• 94.4% chance of no change at June 16th meeting, 94.4% chance of no change at Sept. 22nd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +103 open in Japan 
• China A50 Futures: Indicating -20 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running -29.2% Below 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 50.9% of Issues Advancing, 45.1% Declining
• 177 New 52-Week Highs, 5 New Lows
• 89.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.8%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,200.0 +50.0 points
• Vix 17.1 +.9%
• Total Put/Call .71 unch.
• TRIN/Arms 1.03 -42.3%

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 70.25 +2.25 basis points.

• China Sovereign CDS 37.75 +1.75 basis points.

• Bloomberg Emerging Markets Currency Index 60.78 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 3,112.0 -38 points.
• Volatility Index(VIX) futures 20.77 -.17%.
• FTSE 100 futures +.28%.

• S&P 500 futures +.26%.

• NASDAQ 100 futures +.43%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (JKS)/.48
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• The PPI Final Demand MoM for March is estimated to rise +.5% versus a +.5% gain in Feb. 
• The PPI Ex Food and Energy MoM for March is estimated to rise +.2% versus a +.2% gain in Feb.
  

10:00 am EST 

• Wholesale Trade Sales MoM for Feb.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Inflation Data report, Eurozone Industrial Production report, Bloomberg April US Economic Survey and the (FDX) April Economic Update 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 technology 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 100% net long heading into the day.

Stocks Rising into Final Hour on US Economic Optimism, Lower Long-Term Rates, Dovish Fed Commentary, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.0 -1.1%
• Bloomberg Global Risk On/Risk Off Index 3,125.0 +23.0 points

• Euro/Yen Carry Return Index 134.56 -.18%

• Emerging Markets Currency Volatility(VXY) 10.6 -.66%

• S&P 500 Implied Correlation 48.2 +.6%

• ISE Sentiment Index 115.0 -10.0 points
  

• Total Put/Call .60 -25.0%

• NYSE Arms 1.50 +42.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.30 -.92%
  

• US Energy High-Yield OAS 456.39 +.15%

• European Financial Sector CDS Index 57.87 -1.72%

• Italian/German 10Y Yld Spread 100.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 68.97 +2.6%
  

• Emerging Market CDS Index 176.91 -.7%
  

• iBoxx Offshore RMB China Corporate High Yield Index 189.22 unch.

• 2-Year Swap Spread 13.0 -.5 basis point

• TED Spread 19.0 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
  
• MBS  5/10 Treasury Spread  70.25 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 73.25 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.79 +.36%
• 3-Month T-Bill Yield .01% unch.
  

• Yield Curve 151.0 +1.0 basis point
  

• China Iron Ore Spot 166.10 USD/Metric Tonne +2.66%

• Citi US Economic Surprise Index 37.80 -.9 point

• Citi Eurozone Economic Surprise Index 169.40 -1.1 points
  

• Citi Emerging Markets Economic Surprise Index 24.90 -.7 point

• 10-Year TIPS Spread 2.33 -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 -13 open in Japan 
• China A50 Futures: Indicating -112 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Value unch.

Sector Underperformers:

• 1) Oil Service -1.8% 2) Energy -1.4% 3) Shipping -.7%

Stocks Falling on Unusual Volume: 

• GPK, STZ, FGEN, SKLZ, GBOX, ASO, PRGS and BOX
  

Stocks With Unusual Put Option Activity:

• 1) BOX 2) AMRS 3) OKE 4) STZ 5) CAG
  

Stocks With Most Negative News Mentions:

• 1) SOS 2) FGEN 3) NKE 4) BLUE 5) WW
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.2%

Sector Outperformers:

• 1) Gold and Silver +2.4% 2) Video Gaming +2.0% 3) Alt Energy +1.9%

Stocks Rising on Unusual Volume:

• ORBC, PAR, STPK, BLNK, VUZI, GRWG, OKTA, FTCV, BSIG, NTST, ATEC, PTON, FOUR, RMO, COMM, SDC, MRVI, PCT, PHR, PLNT, GLDD, AMRS, SQ, TPTX, MSM and NARI
  

Stocks With Unusual Call Option Activity:

• 1) NCR 2) ORBC 3) STZ 4) OKTA 5) SHW

Stocks With Most Positive News Mentions:

• 1) SIMO 2) TXT 3) COST 4) ADBE 5) LLY
  

Charts:

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