Tuesday, March 14, 2023

Wednesday Watch

Evening Headlines

Bloomberg:         

Fox News:
CNBC.com:
Zero Hedge:
Newsmax:      
TheGatewayPundit.com:
Twitter: 
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are +.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 135.75 +3.25 basis points. 
  • China Sovereign CDS 75.25 -1.75 basis points. 
  • China Iron Ore Spot 132.9 USD/Metric Tonne +.9%.
  • Bloomberg Emerging Markets Currency Index 47.5 -.05%.
  • Bloomberg Global Risk-On/Risk Off Index  50.7 +.6%. 
  • Bloomberg US Financial Conditions Index -.52 +2.0 basis points.
  • Volatility Index(VIX) futures 23.7 -1.0%.
  • Euro Stoxx 50 futures -.05%.
  • S&P 500 futures -.09%.
  • NASDAQ 100 futures -.08%.  
Morning Preview Links

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

Stocks Higher into Final Hour on US Economic Soft-Landing Hopes, US Regional Bank Bounce, Technical Buying, Financial/Tech Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Most Sectors Rising
  • Volume:  Heavy
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 24.1 -9.2%
  • DJIA Intraday % Swing .79%
  • Bloomberg Global Risk On/Risk Off Index 49.9 +7.1%
  • Euro/Yen Carry Return Index 150.2 +.9%
  • Emerging Markets Currency Volatility(VXY) 11.7 -1.1%
  • CBOE S&P 500 Implied Correlation Index 40.4 -4.6% 
  • ISE Sentiment Index 82.0 -21.0 points
  • Total Put/Call 1.04 unch.
  • NYSE Arms 1.17 +14.7%
Credit Investor Angst:
  • North American Investment Grade CDS Index 86.6 -3.5%
  • US Energy High-Yield OAS 401.29 -7.0%
  • Bloomberg TRACE # Distressed Bonds Traded 370.0 +21
  • European Financial Sector CDS Index 106.5 -3.2% 
  • Credit Suisse Subordinated 5Y Credit Default Swap 530.5 +2.5%
  • Italian/German 10Y Yld Spread 185.0 basis basis points -7.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 139.8 +7.8%
  • Emerging Market CDS Index 255.5 -.52%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.9 -.26%
  • 2-Year Swap Spread 24.25 basis points +2.25 basis points
  • TED Spread 12.75 basis points -22.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -24.25 +17.75 basis points
  • MBS  5/10 Treasury Spread  163.0 +4.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 613.0 +7.0 basis points
  • Avg. Auto ABS OAS 60.0 +2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 47.55 +.09%
  • 3-Month T-Bill Yield 4.75% unch.
  • China Iron Ore Spot 132.7 USD/Metric Tonne +.74%
  • Dutch TTF Nat Gas(European benchmark) 44.2 euros/megawatt-hour -10.9%
  • Citi US Economic Surprise Index 50.3 +2.4 points
  • Citi Eurozone Economic Surprise Index 51.6 -3.0 points
  • Citi Emerging Markets Economic Surprise Index 18.4 +1.3 points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.37 +.04:  Growth Rate +1.1% unch., P/E 17.4+.1
  • S&P 500 Current Year Estimated Profit Margin 12.38% unch.
  • Bloomberg US Financial Conditions Index -.65 +61.0 basis points
  • Yield Curve -60.5 basis points (2s/10s) -7.25 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +2.63% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.73% +1.0 basis point: CPI YoY +5.22% -99.0 basis points
  • 10-Year TIPS Spread 2.31 +7.0 basis points
  • Highest target rate probability for May 3rd FOMC meeting: 47.8%(+15.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 44.8%(+12.2 percentage points) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -52 open in Japan 
  • China A50 Futures: Indicating +76 open in China
  • DAX Futures: Indicating +37 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my tech/medical/industrial sector longs and emerging market shorts
  • Disclosed Trades:  None
  • Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Value +.8%
Sector Underperformers:
  • 1) Electric Vehicles -1.7% 2) Road & Rail -.4% 3) Steel -.3%
Stocks Falling on Unusual Volume: 
  • ALK, JBHT, SMAR, RUN, PNFP, EDU, UAL, DEI, SLG, HELE, ABR, LOVE, LOB, GTLB and RAPT
Stocks With Unusual Put Option Activity:
  • 1) KBAL 2) FRC 3) SCHW 4) PACW 5) ZION
Stocks With Most Negative News Mentions:
  • 1) GTLB 2) RAD 3) RAPT 4) BZFD 5) UAL
Charts:

Bull Radar

Style Outperformer:

  • Small-Cap Value +1.9%
Sector Outperformers:
  • I-Banks +2.7% 2) Banks +2.6% 3) Networking +2.5%
Stocks Rising on Unusual Volume:
  • PACW, FRC, CDMO, WAL, TBBK, SBCF, BG, QTWO, TCBI, UNVR, EBC, VBTX, KEY, AMLX, EWBC, OCFC, SSB, CFR, SCHW, HQY, WBS, LEA, AX, FISV, FHB, AUB, C, GBCI, FFIN, WTFC, OSPN, UMBF, PFS, ASB, LBAI and LPLA
Stocks With Unusual Call Option Activity:
  • 1) WAL 2) FRC 3) PACW 4) KEY 5) DPST
Stocks With Most Positive News Mentions:
  • 1) CDMO 2) PACW 3) LX 4) AMLX 5) RIOT

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open: 
  • (EBIX)/.46
  • (PLCE)/-4.09
After the Close: 
  • (ADBE)/3.68
  • (FIVE)/3.07
  • (GRPN)/-.36
  • (PD)/.02

Economic Releases 

8:30 am EST
  • PPI Final Demand MoM for Feb. is estimated to rise +.3% versus a +.7% gain in Jan.
  • PPI Ex Food and Energy MoM for Feb. is estimated to rise +.4% versus a +.5% gain in Jan.
  • PPI Final Demand YoY for Feb. is estimated to rise +5.4% versus a +6.0% gain in Jan.
  • Empire Manufacturing for March is estimated to fall to -7.8 versus -5.8 in Feb.
  • Retail Sales Advance MoM for Feb. is estimated to fall -.4% versus a +3.0% gain in Jan.
  • Retail Sales Ex Autos MoM for Feb. is estimated unch. versus a +2.3% gain in Jan.
  • Retail Sales Ex Autos and Gas for Feb. is estimated to fall -.2% versus a +1.7% gain in Jan.
10:00 am EST
  • Business Inventories for Jan. is estimated unch. versus a +.3% gain in Dec.
  • The NAHB Housing Market Index for March is estimated to fall to 40.0 versus 42.0 in Feb.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory gain of +416,860 barrels versus a -1,694,000 barrel decline the prior week. Gasoline supplies are estimated to fall -1,402,430 barrels versus a -1,134,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,262,000 barrels versus a +138,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.36% versus a +.2% gain prior.
4:00 pm EST
  • Net Long-Term TIC Flows for Jan.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The UK CPI report, weekly MBA Mortgage Applications report and the UBS Consumer/Retail Conference could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

  • Volume Running +32.4% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 8.6 +3.4
  • 0 Sectors Declining, 11 Sectors Rising
  • 88.5% of Issues Advancing, 9.6% Declining
  • 12 New 52-Week Highs, 23 New Lows
  • 41.6%(+9.5%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 32.0 +4.0
  • Bloomberg Global Risk-On/Risk-Off Index 52.2 +12.0%
  • Russell 1000: Growth/Value 15,385.0 -.04%
  • Vix 22.9 -13.4%
  • Total Put/Call .82 -21.2%
  • TRIN/Arms 1.08 +5.9%