Tuesday, April 05, 2022

Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Diminished Russia/Ukraine Ceasefire Hopes, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line:  Substantially Lower
  • Sector Performance:  Most Sectors Declining
  • Volume:  Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 20.4 +9.6%
  • Bloomberg Global Risk On/Risk Off Index 4,455.0 +79.0 points
  • Euro/Yen Carry Return Index 138.77 +.12%
  • Emerging Markets Currency Volatility(VXY) 10.96 -.99%
  • CBOE S&P 500 Implied Correlation Index 36.2 +10.8% 
  • ISE Sentiment Index 101.0 -28.0 points
  • Total Put/Call .88 +8.6%
  • NYSE Arms .82 -6.8%
Credit Investor Angst:
  • North American Investment Grade CDS Index 65.49 +2.22%
  • US Energy High-Yield OAS 332.07 -3.2%
  • European Financial Sector CDS Index 84.14 +5.4%
  • Italian/German 10Y Yld Spread 165.0 +9.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 98.52 -.7%
  • Emerging Market CDS Index 225.98 +3.2%
  • China Corp. High-Yield Bond USD ETF(KHYB) 29.6 unch.
  • Russia Sovereign Debt Credit Default Swap 4,412.26 +59.4%
  • 2-Year Swap Spread 21.75 -.25 basis point
  • TED Spread 33.0 -12.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -21.5 -.75 basis point
  • MBS  5/10 Treasury Spread  113.0 +5.0 basis points
  • iShares CMBS ETF 49.35 -.64%
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 53.48 -.57%
  • 3-Month T-Bill Yield .64% +9.0 basis points
  • Yield Curve 4.75 +9.25 basis points
  • China Iron Ore Spot 161.90 USD/Metric Tonne +.3%
  • Citi US Economic Surprise Index 50.4 +.3 point
  • Citi Eurozone Economic Surprise Index 36.0 +5.5 points
  • Citi Emerging Markets Economic Surprise Index 32.8 -2.5 points
  • 10-Year TIPS Spread 2.85 +2.0 basis points
  • 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting
US Covid-19:
  • 63 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak -0/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -93.4%(-.1 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating -183 open in Japan 
  • China A50 Futures: Indicating -98 open in China
  • DAX Futures: Indicating -25 open in Germany
Portfolio:
  • Slightly Higher: On gains in my medical sector longs, index hedges and emerging market shorts
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  • Market Exposure:  Moved to 25% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Growth -2.3%
Sector Underperformers:
  • 1) Semis -4.0% 2) Alt Energy -3.6% 3) Gambling -3.4%
Stocks Falling on Unusual Volume: 
  • SNDR, JBHT,. ODFL, ADI, UPS, GGPI, OHI, SAIA, SBUX, BC, HUBG, JBLU, FSLR, MATX, NFE, BRZE, R, AYI, NKTX, SYNA, LTHM, GFS, RIVN, COIN, RMBS, EXPI, MARA, BROS, DOMO, QS, XPO, ON, PLBY, ICHR, IONQ, DWAC, UPST, CVNA, PLL, NVAX, CSTL, ACLS, MP, CDAY, MKSI, VC, AAWW, OC, RMBS, PLL, MKTX, VERV, CCCC, TOST, XPOF, SAVA and BRCC
Stocks With Unusual Put Option Activity:
  • 1) TIP 2) ADI 3) VGK 4) HOG 5) RF
Stocks With Most Negative News Mentions:
  • 1) BRCC 2) MITI 3) CVNA 4) SAVA 5) GRAB
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Value -.2%
Sector Outperformers:
  • 1) Pharma +1.2% 2) Utilities +1.0% 3) Insurance +.8%
Stocks Rising on Unusual Volume:
  • SST, NRGV, RCUS, SRRK, CHNG, RH and CUK
Stocks With Unusual Call Option Activity:
  • 1) DISH 2) TWTR 3) ATUS 4) ICLN 5) HMHC
Stocks With Most Positive News Mentions:
  • 1) SST 2) NRGV 3) RCUS 4) LVO 5) EZPW

Morning Market Internals

NYSE Composite Index:

  • Volume Running +11.8% Above 100-Day Average 
  • 6 Sectors Rising, 5 Sectors Declining
  • 26.4% of Issues Advancing, 71.0% Declining
  • 107 New 52-Week Highs, 59 New Lows
  • 46.3% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 50.0% 
  • Bloomberg Global Risk-On/Risk-Off Index 4,494.0 +115.0 points
  • Russell 1000: Growth/Value 16,785 -1.39%
  • Vix 19.9 +7.3%
  • Total Put/Call .77 -4.9%
  • TRIN/Arms .73 -17.1%

Monday, April 04, 2022

Tuesday Watch

Night Trading 

  • Asian equity indices are -.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 98.0 -4.75 basis points. 
  • China Sovereign CDS 57.75 -4.5 basis points.
  • Bloomberg Emerging Markets Currency Index 53.78 -.02%. 
  • Bloomberg Global Risk-On/Risk Off Index 4,335.0 -43.0 points.
  • Volatility Index(VIX) futures 23.3 +.7%.
  • Euro Stoxx 50 futures -.05%.
  • S&P 500 futures -.14%.
  • NASDAQ 100 futures -.11%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (AYI)/2.37
  • (LNN)/1.20
After the Close:
  • (ARRY)/-.03
  • (SGH)/.72
Economic Releases
8:30 am EST
  • The Trade Balance for February is estimated at -$88.5B versus -$89.7B in Jan.
10:00 am EST
  • The ISM Services Index for March is estimated to rise to 58.5 versus 56.5 in Feb.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Williams speaking, Fed's Daly speaking, Fed's Brainard speaking, Eurozone PMI report, RBA rate decision, weekly US retail sales reports, (ADI) investor day, (PWR) investor day, (AUY) analyst day and the (FDS) investor 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 technology and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Rising into Afternoon on Russia/Ukraine Ceasefire Hopes, Sector Rotation, Short-Covering, Tech/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line:  Higher
  • Sector Performance:  Mixed
  • Volume:  Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 19.2 -2.1%
  • Bloomberg Global Risk On/Risk Off Index 4,330.0 -8.0 points
  • Euro/Yen Carry Return Index 138.6 -.68%
  • Emerging Markets Currency Volatility(VXY) 11.1 -1.7%
  • CBOE S&P 500 Implied Correlation Index 33.6 -6.6% 
  • ISE Sentiment Index 134.0 +34.0 points
  • Total Put/Call .76 -25.5%
  • NYSE Arms .79 +12.9%
Credit Investor Angst:
  • North American Investment Grade CDS Index 64.86 -2.7%
  • US Energy High-Yield OAS 343.59 -.52%
  • European Financial Sector CDS Index 79.84 -1.9%
  • Italian/German 10Y Yld Spread 156.0 +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 99.0 -2.7%
  • Emerging Market CDS Index 221.72 -1.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 29.6 +.07% 
  • Ukraine Sovereign Debt Credit Default Swap 2,871.5 -.07%
  • 2-Year Swap Spread 22.0 -1.75 basis points
  • TED Spread 45.25 -.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.75 unch.
  • MBS  5/10 Treasury Spread  108.0 -3.0 basis points
  • iShares CMBS ETF 49.63 +.06%
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 53.75 +.25%
  • 3-Month T-Bill Yield .55% +4.0 basis points
  • Yield Curve -4.5 +1.0 basis point
  • China Iron Ore Spot 163.7 USD/Metric Tonne +1.8%
  • Citi US Economic Surprise Index 50.1 +3.6 points
  • Citi Eurozone Economic Surprise Index 30.5 -1.7 points
  • Citi Emerging Markets Economic Surprise Index 35.3 -1.9 points
  • 10-Year TIPS Spread 2.83 unch.
  • 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting
US Covid-19:
  • 63 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak -1/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -93.3%(-.6 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +68 open in Japan 
  • China A50 Futures: Indicating +58 open in China
  • DAX Futures: Indicating +28 open in Germany
Portfolio:
  • Higher: On gains in my tech/consumer discretionary sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 75% Net Long