Friday Watch

Evening Headlines

Bloomberg:        

• Xi Tightens Communist Party Grip Over China in Major Revamp.
• Turmoil Means ECB Will Finally Set Rates One Meeting at a Time.
•  Global Banking Turmoil Threatens to Topple Mexico’s ‘Super Peso’.
• ‘Seek-and-Destroy’ Markets Pile Pressure on Global Central Banks.
• Asia Stocks Rise on Bank Rescue, Bond Yields Climb: Markets Wrap.
• Microsoft to Bring OpenAI’s Chatbot Technology to Office Apps.
• A Fast and Furious Year by the Fed That Blindsided Everyone.
• Banks Borrow $164.8 Billion From Fed in Rush to Backstop Liquidity.
• Money Market Funds Get Biggest Cash Inflow Since Early 2020.
• Schwab Clients Pull $8.8 Billion From Prime Funds This Week.

Wall Street Journal:

• Bank’s Executives Sold $12 Million in Stock in Months Before Crash.
• Streetwise: A Cost to Moral Hazard. 
• Credit Suisse Shares Rebound After Bank Secures Loan.
• TikTok CEO Says Sale Won’t Protect U.S. Data.
• Global Supply of Cocaine Hits Record Level, U.N. Says.
• Heard on the Street: Banks’ Plan Won’t Solve Bigger Problems.
• Why Washington Chose to Rescue SVB Depositors.
• Tiger Global Writes Down Venture Funds’ Bets by 33%.
• Why Is the Maternity Mortality Rate So High in the U.S.?
• Wave of Stealthy China Cyberattacks Hits U.S.
• More Students Are Turning Toward Apprenticeships.
• Did ESG Help Sink SVB? One entrepreneur says the bank was offering ‘basically subprime business loans.’

Fox News:

• Dem-run city becomes the latest to crack down on gas appliances as part of liberal climate agenda.

CNBC.com:

• Wall Street rides to the rescue as 11 banks pledge First Republic $30 billion in deposits.
• One year after the first rate hike, the Fed stands at policy crossroads.
• Banks take advantage of Fed crisis lending programs.

MarketWatch:   

• First Republic gets $30 billion in deposits from 11 major U.S. banks including JPMorgan Chase, BofA and Wells Farg.
• U.S. stocks set for wild swings as trillions in options contracts set to expire Friday.
• YouTube TV hikes prices to $72.99 a month, citing high content costs.

Zero Hedge:

• The Trump, DeSantis, Tucker Effect: New Polls Show Republicans Increasingly Done With Ukraine.
• Biden DOJ Stands Accused Of Hiding This Evidence Of Biden-China Corruption: Sperry.
• Target Shutters Downtown Philly Location Citing "Declining Performance".
• 'An All-Out Assault On The Second Amendment': Gun Rights Groups Respond To Biden’s New Executive Order.
• Get Woke, Go Broke? It's Time To Talk About SVB's Ties To The World Economic Forum.
• Watch: Border Patrol Chief Testifies Border Is Not Secure, Wall Needed.
• Big Banks Agree To Historic $30 Billion Unsecured Deposit Injection In First Republic Bank
• The Tyrants Are Passing State Laws To Push CBDCs.
• James O’Keefe Announces New Project After Project Veritas Ouster.
• The Liquidity Phase Of The Bank Crisis Is Over... But The Solvency Phase Is Getting Worse.
• FedEx Soars After Boosting Earnings Forecast Amid Aggressive Cost-Cutting.
• Pornhub Acquired By Canadian Private Equity Firm 'Ethical Capital Partners'.
• As Bank Crisis Looms, Biden's Aggressive Focus On Firearms Is Suspicious.
• Americans Value Truck-Parking Facilities, But Not In Their Backyards.
• Risk appetite recovers on distressed bank lifelines - Newsquawk Asia-Pac Market Open.
• Fed Balance Sheet Explodes By $300BN As Bank Bailouts Lead To Record Discount Window Surge.
• Stocks bought and bonds sold as distressed banks are offered a lifeline - Newsquawk US Market Wrap.
• Stocks Soar As Big-Banks' Depo-Reacharound Rescues Regionals; Bonds Dumped.

Newsmax:      

• Rep. Comer: Bank Records Show Hallie Biden Got China Cash.
• Rep. Turner to Newsmax: Biden Family's Business Links 'Lead to China'.
• Kimberly Guilfoyle: SVB's 'Woke' Actions 'Disturbing'.
• Comer: Bank Records Show Hallie Biden Got China Cash.

TheGatewayPundit.com:

• UPDATE: Contracts Released For CDC Purchasing Of Phone Data To Track Americans’ Compliance With COVID Lockdowns.
• BREAKING: House Oversight Committee Shows Bidens Received $1 Million after China Wired $3 Million to Biden Associate.
• “I Was Severely Injured by the Moderna Vaccine” – Former Pussycat Dolls Member Shares Her Vaccine Injury Story (VIDEO).
• The Great Reset: Journalist Discovers Greta Thunberg’s Ties to Klaus Schwab’s World Economic Forum.
• ALL IN THE FAMILY: House Oversight Shows Daughter-in-Law Hallie Biden Got China Cash in 2017 While Sleeping with Her Dead Husband’s Brother Hunter.
• Top Executives at First Republic Bank Sold Millions of Dollars in Company Stock Before Shares Plummeted – And No SEC Filing!
• Treasury Secretary Janet Yellen Admits Joe Biden’s Inflation Crisis is Linked to the Banking Crisis (VIDEO).
• McCarthy’s Approval Surges After Release Of Jan 6th Tapes, Trump Praise – Far Higher Than RINO Paul Ryan’s At Similar Point.
• Rasmussen Poll Shows a Majority of ALL Voters Believe Trump’s 2020 Campaign Was Sabotaged by GOP D.C. Politicians.

The Epoch Times: 

• Demand Plunges in China, Contradicting CCP’s Official Narrative About Economy.
• China Ramping Up Intelligence Collection Efforts Against US: Expert.
• UK Bans TikTok From Government Phones.

 

Twitter: 

• @backtolife_2000 - Only ONE member of failed SVB's board had a career in investment banking - and the rest were Obama, Clinton mega-donors who 'grieved' when Trump won including one who went to Shinto shrine 'to pray'.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 942,034 Reports(+3,859 from prior week) Through March 3rd, 2023.
  

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Night Trading 

• Asian equity indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 135.0 -2.25 basis points. 

• China Sovereign CDS 76.0 -4.0 basis points. 
• China Iron Ore Spot 129.0 USD/Metric Tonne -.12%.

• Bloomberg Emerging Markets Currency Index 47.2 +.04%.
• Bloomberg Global Risk-On/Risk Off Index  48.6 +.9%. 
• Bloomberg US Financial Conditions Index -.76 +13.0 basis points.
  
• Volatility Index(VIX) futures 23.9 +1.3%.
• Euro Stoxx 50 futures +.39%.

• S&P 500 futures -.14%.

• NASDAQ 100 futures -.07%.  

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 mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Reversing Higher into Final Hour on Diminishing Global Bank Contagion Fears, US Economic Soft-Landing Hopes, Earnings Optimism, Tech/Financial Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.8 -9.1%
• DJIA Intraday % Swing 1.69%
  
• Bloomberg Global Risk On/Risk Off Index 48.2 +10.3%

• Euro/Yen Carry Return Index 147.6 +.34%

• Emerging Markets Currency Volatility(VXY) 12.2 +.3%

• CBOE S&P 500 Implied Correlation Index 40.0 -6.0% 

• ISE Sentiment Index 96.0 +30.0 points
  

• Total Put/Call .93 -6.1%

• NYSE Arms .86 -16.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 84.2 -4.1%
  

• US Energy High-Yield OAS 422.62 -5.0%
• Bloomberg TRACE # Distressed Bonds Traded 440.0 +74
  

• European Financial Sector CDS Index 124.04 -5.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 1,079.40 +10.4%
  

• Italian/German 10Y Yld Spread 190.0 basis basis points -8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 139.75 +.16%
  

• Emerging Market CDS Index 259.30 -1.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.9 -.44%

• 2-Year Swap Spread 27.75 basis points +.25 basis point
  

• TED Spread 26.5 basis points +6.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -25.75 +10.75 basis points
  
• MBS  5/10 Treasury Spread  162.0 +4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 628.0 +5.0 basis points
  
• Avg. Auto ABS OAS 68.0 +5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.1 +.04%
• 3-Month T-Bill Yield 4.65% -1.0 basis point
  

• China Iron Ore Spot 128.9 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 44.3 euros/megawatt-hour +3.4%

• Citi US Economic Surprise Index 58.1 +9.2 points

• Citi Eurozone Economic Surprise Index 49.2 -.6 point
  

• Citi Emerging Markets Economic Surprise Index 21.4 -.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.30 -.15:  Growth Rate +1.3% +.1 percentage point, P/E 17.5 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.38% unch.
  
• Bloomberg US Financial Conditions Index -.74 +38.0 basis points
  
• Yield Curve -58.75 basis points (2s/10s) +16.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +3.25% +10.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.73% unch.: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.23 -5.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 57.7%(+21.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 43.2%(+13.1 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +10 open in Japan 
• China A50 Futures: Indicating +35 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value +1.1%
  

Sector Underperformers:

• 1) Gold & Silver -1.1% 2) REITs -.3% 3) Foods unch.

Stocks Falling on Unusual Volume: 

• BXP, SLG, IOT, OPI, HASI, HALO, TNP and TITN
  

Stocks With Unusual Put Option Activity:

• 1) FRC 2) PACW 3) CFG 4) DPST 5) RILY
  

Stocks With Most Negative News Mentions:

• 1) LPSN 2) ESPR 3) VORB 4) PTRA 5) TGEN
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.1%
  

Sector Outperformers:

• Insurance +3.4% 2) AI/Robotics +3.3% 3) Semis +3.0%

Stocks Rising on Unusual Volume:

• EVCM, PD, WAL, PATH, FRC, CERT, JBI, LOB, CMA, OCFC, ASO, WBS, WTFC, SNAP, SD, ZION, RF, AMD, BOH, PACW, BIVI, FRPT, KEY, RYAN, ANET, BMRN, UBSI, TCBI, ADBE, HOPE, UCBI, ZION, NCNO, OVV, HTGC, HOMB, OZK, ABCB, CFG, WOOF, GTLB, HWC, GOOG, VBTX, KEY, CVI, FCF, FHB, EQH, MEDP, QTWO, SAFE, HIG, PNC, WRB, IBOC, OXY, CADE, FITB, FBP, CFR, CVBF, AUB, VLY, MSFT, ASB, SASR, HES, ONB, FNB, EWBC, ZNTL and AX
  

Stocks With Unusual Call Option Activity:

• 1) PACW 2) FRC 3) KRE 4) DPST 5) SCHW

Stocks With Most Positive News Mentions:

• 1) PD 2) PATH 3) WE 4) YRD 5) ADBE
  

Charts:

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

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

Earnings of Note 
Company/Estimate 

Before the Open: 

• (BLDP)/-.14
  

After the Close: 

• (MANU)/.03
  

Economic Releases 

9:15 am EST

• Industrial Production MoM for Feb. is estimated to rise +.2% versus unch. in Jan.
• Capacity Utilization for Feb. is estimated to rise to 78.4% versus 78.3% in Jan.
• Manufacturing Production for Feb. is estimated to fall -.3% versus a +1.0% gain in Jan.
  

10:00 am EST

• The Leading Index for Feb. is estimated to fall -.3% versus a -.3% decline in Jan.
• Univ. of Mich. Consumer Sentiment for March is estimated at 67.0 versus 67.0 in Feb.
• Univ. of Mich. 1Yr Inflation Expectations for March is estimated at +4.1% versus an expectation of a +4.1% rise in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone CPI report could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +37.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 6.7 +.5
  
• 2 Sectors Declining, 9 Sectors Rising
• 62.9% of Issues Advancing, 32.6% Declining
• 14 New 52-Week Highs, 160 New Lows
• 37.5%(unch.) of Issues Above 200-day Moving Average
• Average 14-Day RSI 28.0 +4.0
  
• Bloomberg Global Risk-On/Risk-Off Index 45.7 +4.4%
  
• Russell 1000: Growth/Value 15,817.7 +1.0%
  
• Vix 23.9 -8.5%
• Total Put/Call .93 -6.1%
• TRIN/Arms 1.25 +22.3%