Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 127.75 -3.25 basis points. 

• China Sovereign CDS 71.5 -1.5 basis points. 
• China Iron Ore Spot 117.9 USD/Metric Tonne -2.4%.

• Bloomberg Emerging Markets Currency Index 47.9 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 54.2 -.3%. 
• Bloomberg US Financial Conditions Index -.36 -1.0 basis point.
  
• Volatility Index(VIX) futures 21.7 +.69%.
• Euro Stoxx 50 futures +.33%.

• S&P 500 futures -.05%.

• NASDAQ 100 futures -.19%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity 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 Reversing Slightly Lower into Afternoon on US Policy-Induced Stagflation Fears, Regional Bank Contagion Worries, US Economic Data, Financial/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.2 +2.6%
• DJIA Intraday % Swing 1.16%
  
• Bloomberg Global Risk On/Risk Off Index 53.6 -1.2%

• Euro/Yen Carry Return Index 150.4 +.07%

• Emerging Markets Currency Volatility(VXY) 12.0 +1.0%

• CBOE S&P 500 Implied Correlation Index 34.4 +1.1% 

• ISE Sentiment Index 100.0 +11.0 points
  

• Total Put/Call .92 -8.9%

• NYSE Arms 1.07 +18.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 756.9 +1.01%
  

• US Energy High-Yield OAS 377.4 -1.9%
• Bloomberg TRACE # Distressed Bonds Traded 444.0 -11
  

• European Financial Sector CDS Index 98.59 -.36% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 382.53 -9.9%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.33 -1.09%
  

• Emerging Market CDS Index 230.15 +.29%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.79 -.1%

• 2-Year Swap Spread 33.75 basis points +.5 basis point
  

• TED Spread 50.0 basis points +6.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.75 +2.5 basis points
  
• MBS  5/10 Treasury Spread  152.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 679.0 +6.0 basis points
  
• Avg. Auto ABS OAS 92.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.84 -.08%
• 3-Month T-Bill Yield 4.65% -1.0 basis point
  

• China Iron Ore Spot 120.35 USD/Metric Tonne -.37%
• Dutch TTF Nat Gas(European benchmark) 51.4 euros/megawatt-hour +7.4%

• Citi US Economic Surprise Index 52.0 -5.0 points

• Citi Eurozone Economic Surprise Index 46.5 -3.5 points
  

• Citi Emerging Markets Economic Surprise Index 25.2 -1.3 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.11 +.13:  Growth Rate +1.7% unch., P/E 18.2 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.29% -1.0 basis point
  
• Bloomberg US Financial Conditions Index -.42 -2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.02 +1.0 basis point
  
• US Yield Curve -57.0 basis points (2s/10s) +1.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +1.71% -78.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.60% -13.0 basis points: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.31 -3.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 56.9%(+10.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 47.3%(-2.0 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -43 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating +146 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/medical sector longs
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -.7%
  

Sector Underperformers:

• 1) Shipping -3.2% 2) Alt Energy -2.7% 3) Airlines -2.6%

Stocks Falling on Unusual Volume: 

• ACLX, JD, PAYX, ASAI, BILI, MT, NEWR, BSTZ, FSLR, DLR, WWE, BABA, MNSO, FLNC, TASK, ASC, EHAB, EURN, ATEN, STNG, EVA, NRDS, EXR, TWO, ENVX, SPT, PLUG, SMTC, TRIN, SBGI, TSLA, INSW, SAFE, TNP, VLRS, TWST, VLRS, TRMD, EDR, TNK, FRO, BMEA and ASND
  

Stocks With Unusual Put Option Activity:

• 1) WWE 2) NYCB 3) FUBO 4) TECK 5) LOW
  

Stocks With Most Negative News Mentions:

• 1) TSLA 2) PAYX 3) CTLT 4) TEAM 5) DISH
  

Charts:

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

Bull Radar

 Style Outperformer:

• Large-Cap Value +.2%
  

Sector Outperformers:

• Oil Service +6.3% 2) Energy +4.5% 3) Healthcare Providers +2.1%

Stocks Rising on Unusual Volume:

• APLS, PRCT, OVV, CPE, MRO, ISEE, HAL, SLB, M, DWAC, PPG, OXY, LSI, ACDC and PSA
  

Stocks With Unusual Call Option Activity:

• 1) SGML 2) AGI 3) CANO 4) LSI 5) DEN

Stocks With Most Positive News Mentions:

• 1) BSFC 2) APA 3) RKFL 4) APLS 5) XOM
  

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: 

• (AYI)/2.73
• (LNN)/1.53
• (MSM)/1.36
  

After the Close: 

• (RGP)/.33
• (SGH)/.60
  

Economic Releases

10:00 am EST

• The JOLTS Job Openings for Feb. is estimated to fall to 10500K versus 10824K in Jan.
• Factory Orders for Feb. is estimated to fall -.5% versus a -1.6% decline in Jan.
• Factory Orders Ex Transports for Feb. is estimated unch. versus a +1.2% gain in Jan.
• Durable Goods Orders  for Feb. revisions. 
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Cook speaking, Eurozone Industrial Production report, weekly US retail sales reports, BofA Auto Summit, (DCI) investor day, (PRGS) investor day, (CRWD) investor briefing and the (ASO) investor event could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +9.6% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 7.6 -4.6
  
• 7 Sectors Declining, 4 Sectors Rising
• 43.5% of Issues Advancing, 53.9% Declining
• 45 New 52-Week Highs, 4 New Lows
• 46.2%(-.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.0 +4.0
  
• Bloomberg Global Risk-On/Risk-Off Index 53.3 -1.7%
  
• Russell 1000: Growth/Value 15,915.9 -.82%
  
• Vix 19.3 +3.0%
• Total Put/Call .87 -13.9%
• TRIN/Arms 1.00 +11.11%