Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 109.75 +2.0 basis points. 

• China Sovereign CDS 67.0 -2.0 basis points.
  

• Bloomberg Emerging Markets Currency Index 53.30 -.04%. 
• Bloomberg Global Risk-On/Risk Off Index 4,335.0 -7.0 points.
• Volatility Index(VIX) futures 25.9 -1.4%.
• Euro Stoxx 50 futures -.24%.

• S&P 500 futures +.36%.

• NASDAQ 100 futures +.46%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BBBY)/.04
• (BLK)/9.01
• (DAL)/-1.27
• (FAST)/.45
• (JPM)/2.71
• (SJR)/.41
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• The PPI Final Demand MoM for March is estimated to rise +1.1% versus a +.8% gain in Feb.
• The PPI Ex Food and Energy MoM for March is estimated to rise +1.1% versus a +.2% gain in Feb.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +256,333 barrels versus a +2,421,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -136,440 barrels versus a -2,041,000 barrel decline the prior week. Distillate inventories are estimated to fall by -379,560 barrels versus a +771,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.22% versus a +.4% gain prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK CPI report, 30Y T-Bond auction, weekly MBA Mortgage Applications report and the (PVH) 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Technical Selling, Pharma/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line:  Higher
  

• Sector Performance:  Most Sectors Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.0 -5.5%
• Bloomberg Global Risk On/Risk Off Index 4,406.0 +142.0 points

• Euro/Yen Carry Return Index 139.66 -.59%

• Emerging Markets Currency Volatility(VXY) 11.1 +.18%

• CBOE S&P 500 Implied Correlation Index 40.1 -2.1% 

• ISE Sentiment Index 126.0 +43.0 points
  

• Total Put/Call .83 -18.6%

• NYSE Arms 1.09 +55.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.15 -.48%
  

• US Energy High-Yield OAS 368.38 +3.1%

• European Financial Sector CDS Index 87.21 -1.4%

• Italian/German 10Y Yld Spread 162.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 109.0 +2.5%
  

• Emerging Market CDS Index 250.79 +.79%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.32 -.46%
• Russia Sovereign Debt Credit Default Swap 10,160.3 -.99%
  

• 2-Year Swap Spread 25.0 -.25 basis point
  

• TED Spread 28.0 -5.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread  115.0 -6.0 basis points
  
• iShares CMBS ETF 49.27 +.77%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.32 +.01%
• 3-Month T-Bill Yield .72% +3.0 basis points
  

• Yield Curve 33.75 +5.75 basis points
  

• China Iron Ore Spot 155.25 USD/Metric Tonne +2.7%

• Citi US Economic Surprise Index 48.8 -8.2 points

• Citi Eurozone Economic Surprise Index 31.7 +1.8 points
  

• Citi Emerging Markets Economic Surprise Index 32.0 +1.0 point

• 10-Year TIPS Spread 2.90 -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:

• 72 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak +2/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -93.6%(+.2 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +41 open in Japan 
• China A50 Futures: Indicating -66 open in China

• DAX Futures: Indicating -103 open in Germany

Portfolio:

• Slightly Higher: On gains in my commodity sector longs, index hedges and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to Market Neutral
  

Bear Radar

Style Underperformer:

• Large-Cap Value +.3%

Sector Underperformers:

• 1) Pharma -.9% 2) Banks -.6% 3) Social Media -.5%

Stocks Falling on Unusual Volume: 

• CSTL, CTRE, CVNA, SBRA, OHI, AMED, BRCC, SST, ACI, CHGG, KMX, ZNTL and VERU
  

Stocks With Unusual Put Option Activity:

• 1) VERU 2) KMX 3) BSX 4) XLY 5) BMY
  

Stocks With Most Negative News Mentions:

• 1) MYOV 2) KMX 3) AFIB 4) OCGN 5) NVDA
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.5%

Sector Outperformers:

• 1) Oil Service +4.1% 2) Energy +2.9% 3) Gold & Silver +2.3%

Stocks Rising on Unusual Volume:

• AMR, METC, GOGO, TWI, UUUU, WFRD, IMXI, ARLP, CRWD and SAH
  

Stocks With Unusual Call Option Activity:

• 1) USFD 2) PHM 3) KMX 4) PPL 5) PTEN

Stocks With Most Positive News Mentions:

• 1) BDSX 2) IFBC 3) BTU 4) CRWD 5) RICK
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -7.1% Below 100-Day Average 
• 9 Sectors Rising, 2 Sectors Declining
• 77.8% of Issues Advancing, 18.9% Declining
• 64 New 52-Week Highs, 53 New Lows
• 39.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.2% 
• Bloomberg Global Risk-On/Risk-Off Index 4,462.0 +186.0 points
• Russell 1000: Growth/Value 15,985 +.33%
  
• Vix 22.9 -5.9%
• Total Put/Call .73 -28.4%
• TRIN/Arms 1.74 +148.5%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 107.75 +5.0 basis points. 

• China Sovereign CDS 69.0 +4.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 53.29 -.04%. 
• Bloomberg Global Risk-On/Risk Off Index 4,270.0 +6.0 points.
• Volatility Index(VIX) futures 26.0 +.11%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.11%.

• NASDAQ 100 futures -.14%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ACI)/.65
• (KMX)/1.30
  

After the Close:

• None of note
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for March is estimated to fall to 95.0 versus 95.7 in Feb.
  

8:30 am EST

• The CPI MoM for March is estimated to rise +1.2% versus a +.8% gain in Feb.
• The CPI Ex Food and Energy MoM for March is estimated to rise +.5% versus a +.5% gain in Feb.
• Real Avg. Weekly Earnings YoY for March.
  

2:00 pm EST

• The Monthly Budget Statement for March is estimated at -$190.0B versus -$659.6B in Feb.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, German CPI report, German ZEW Index, China Trade Balance report, 10Y T-Note auction, weekly US retail sales reports, BofA Automotive Summit, Wells Fargo Biotech Forum, (ABEV) investor day, (EPD) analyst meeting and the (RGP) investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and healthcare shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.