Morning Market Internals

NYSE Composite Index:

• Volume Running -6.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 7.8 +1.2
  
• 8 Sectors Declining, 3 Sectors Rising
• 50.6% of Issues Advancing, 45.8% Declining
• 13 New 52-Week Highs, 35 New Lows
• 41.1%(+.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.0 +3.0
  
• Bloomberg Global Risk-On/Risk-Off Index 58.0 +5.7%
  
• Russell 1000: Growth/Value 15,995.7 +.27%
  
• Vix 20.4 -4.6%
• Total Put/Call .78 -23.5%
• TRIN/Arms 1.02 +47.8%
  

Wednesday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 143.75 -2.5 basis points. 

• China Sovereign CDS 79.0 -3.25 basis points. 
• China Iron Ore Spot 123.7 USD/Metric Tonne +.17%.

• Bloomberg Emerging Markets Currency Index 47.4 +.01%.
• Bloomberg Global Risk-On/Risk Off Index  47.8 -.39%. 
• Bloomberg US Financial Conditions Index -.44 -3.0 basis points.
  
• Volatility Index(VIX) futures 23.0 +1.0%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.01%.

• NASDAQ 100 futures -.04%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by energy 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 50% net long heading into the day.

Stocks Higher into Afternoon on Less European/Emerging Markets/US High-Yield Debt Angst, Dovish US Fed Hopes, Short-Covering, Energy/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 21.6 -10.8%
• DJIA Intraday % Swing 1.46%
  
• Bloomberg Global Risk On/Risk Off Index 48.02 +13.4%

• Euro/Yen Carry Return Index 148.6 +1.3%

• Emerging Markets Currency Volatility(VXY) 12.0 unch.

• CBOE S&P 500 Implied Correlation Index 37.9 -7.0% 

• ISE Sentiment Index 83.0 -5.0 points
  

• Total Put/Call 1.03 +25.6%

• NYSE Arms .73 +2.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.5 -6.8%
  

• US Energy High-Yield OAS 427.4 -5.8%
• Bloomberg TRACE # Distressed Bonds Traded 437.0 -27
  

• European Financial Sector CDS Index 107.57 -10.8% 
• Credit Suisse Subordinated 5Y Credit Default Swap 329.64 -27.4%
  

• Italian/German 10Y Yld Spread 182.0 basis basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 142.9 -6.3%
  

• Emerging Market CDS Index 256.1 -3.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.9 +.04%

• 2-Year Swap Spread 30.25 basis points +4.75 basis points
  

• TED Spread 25.25 basis points -41.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.25 -9.25 basis points
  
• MBS  5/10 Treasury Spread  160.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 643.0 +12.0 basis points
  
• Avg. Auto ABS OAS 81.0 +9.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.4 +.11%
• 3-Month T-Bill Yield 4.64% +7.0 basis points
  

• China Iron Ore Spot 123.9 USD/Metric Tonne +.33%
• Dutch TTF Nat Gas(European benchmark) 42.4 euros/megawatt-hour +7.8%

• Citi US Economic Surprise Index 52.7 +2.8 points

• Citi Eurozone Economic Surprise Index 45.1 -1.4 points
  

• Citi Emerging Markets Economic Surprise Index 19.3 -.7 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.94 -.03:  Growth Rate +1.6% unch., P/E 17.6 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.29% -7.0 basis points
  
• Bloomberg US Financial Conditions Index -.36 +93.0 basis points
  
• Yield Curve -57.75 basis points (2s/10s) -10.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +3.25% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.73% unch.: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.23 +8.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 55.4%(+16.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 45.4%(+38.8 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +183 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating +161 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value +.9%
  

Sector Underperformers:

• 1) Gold & Silver -4.2% 2) Utilities -3.4% 3) REITs -.9%

Stocks Falling on Unusual Volume: 

• DWAC, CLDX, KRTX and ACDC
  

Stocks With Unusual Put Option Activity:

• 1) BKU 2) FRC 3) OZK 4) PACW 5) FITB
  

Stocks With Most Negative News Mentions:

• 1) ALT 2) CTRN 3) HUYA 4) TME 5) KERN
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +1.6%
  

Sector Outperformers:

• Regional Banks +5.3% 2) Alt Energy +4.6% 3) Oil Service +3.0%

Stocks Rising on Unusual Volume:

• FRC, WAL, PACW, NOVA, VBTX, RUN, DO, EWBC, KEY, ALLY, PNFP, SPWR, USB, SNV, HLIT, ENPH, COLB, FL, ZION, HRI, FFBC, KNX, CMA, EQH, BOH, SCHW, FTDR, TFC, APA, HBAN, ALKT, SFNC, CERT, MTB, TKR, SJT, KRC, URI, SKT, FLT, DEI, BXMT, CUZ, RF, FITB, RNG, EBC, SLG, BAC and HBNC
  

Stocks With Unusual Call Option Activity:

• 1) PACW 2) FRC 3) FHN 4) KRE 5) NYCB

Stocks With Most Positive News Mentions:

• 1) WAL 2) CISO 3) ONON 4) WTTR 5) PACW
  

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: 

• (OLLI)/.79
• (WOOF)/.24
• (WGO)/1.25
  

After the Close: 

• (CHWY)/-.10
• (KBH)/1.12
• (SCS)/.11
• (WOR)/.73
  

Economic Releases

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,556,000 barrels versus a +1,550,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,852,000 barrels versus a -2,061,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,702,430 barrels versus a -2,537,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +.43% versus a +2.2% gain prior.
  

2:00 pm EST

• The FOMC is expected to raise the benchmark Fed Funds Rate +25.0 basis points to 4.75%-5.0%.

Upcoming Splits

• (GCBC) 2-for-1
• (FCUV) 3-for-2
  

Other Potential Market Movers

• The Fed press conference, weekly MBA Mortgage Applications report, Sidoti Small Cap Conference, (HSY) investor day and the (ADSK) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST