Tuesday, April 04, 2023

Wednesday Watch

Evening Headlines

Bloomberg:       

Zero Hedge:
Newsmax:      
TheGatewayPundit.com:
Twitter: 
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 130.0 +2.25 basis points. 
  • China Sovereign CDS 74.25 +2.75 basis points. 
  • China Iron Ore Spot 118.2 USD/Metric Tonne -.4%.
  • Bloomberg Emerging Markets Currency Index 47.9 +.04%.
  • Bloomberg Global Risk-On/Risk Off Index 54.6 +1.6%. 
  • Bloomberg US Financial Conditions Index -.50 -6.0 basis points.
  • Volatility Index(VIX) futures 22.0 unch.
  • Euro Stoxx 50 futures -.09%.
  • S&P 500 futures +.10%.
  • NASDAQ 100 futures +.11%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial 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 Afternoon on US Policy-Induced Stagflation Fears, Declining Confidence in US Political/Judicial System, Regional Bank Contagion Worries, Industrial/Financial Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Almost Every Sector Declining
  • Volume:  Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 19.2 +3.7%
  • DJIA Intraday % Swing 1.08%
  • Bloomberg Global Risk On/Risk Off Index 53.7 -1.4%
  • Euro/Yen Carry Return Index 150.4 -.16%
  • Emerging Markets Currency Volatility(VXY) 11.7 -1.7%
  • CBOE S&P 500 Implied Correlation Index 33.8 +2.4% 
  • ISE Sentiment Index 94.0 -17.0 points
  • Total Put/Call 1.01 +9.8%
  • NYSE Arms .96 -18.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 78.97 +3.5%
  • US Energy High-Yield OAS 386.37 +2.8%
  • Bloomberg TRACE # Distressed Bonds Traded 442.0 -2
  • European Financial Sector CDS Index 102.52 +3.7% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 373.71 -2.3%
  • Italian/German 10Y Yld Spread 187.0 basis basis points +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 129.04 -.28%
  • Emerging Market CDS Index 234.94 +2.5%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.82 -.33%
  • 2-Year Swap Spread 33.75 basis points +.5 basis point
  • TED Spread 61.5 basis points +11.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -14.75 +1.0 basis point
  • MBS  5/10 Treasury Spread  153.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 686.0 +7.0 basis points
  • Avg. Auto ABS OAS 94.0 +2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 47.8 -.04%
  • 3-Month T-Bill Yield 4.72% +7.0 basis points
  • China Iron Ore Spot 118.4 USD/Metric Tonne -.29%
  • Dutch TTF Nat Gas(European benchmark) 46.6 euros/megawatt-hour -9.3%
  • Citi US Economic Surprise Index 48.1 -3.9 points
  • Citi Eurozone Economic Surprise Index 46.8 +.3 point
  • Citi Emerging Markets Economic Surprise Index 25.4 +.2 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.11 unch.:  Growth Rate +1.7% unch., P/E 18.1 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.29% unch.
  • Bloomberg US Financial Conditions Index -.47 -13.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -3.95 +7.0 basis points
  • US Yield Curve -51.25 basis points (2s/10s) +5.75 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +1.71% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.60% -13.0 basis points: CPI YoY +5.22% unch.
  • 10-Year TIPS Spread 2.27 -4.0 basis points
  • Highest target rate probability for June 14th FOMC meeting: 53.5%(+12.2 percentage points) chance of 4.75%-5.0%. Highest target rate probability for July 26th meeting: 44.6%(-2.7 percentage points) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -127 open in Japan 
  • China A50 Futures: Indicating +81 open in China
  • DAX Futures: Indicating +154 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my utility/medical sector longs and index hedges
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Value -2.3%
Sector Underperformers:
  • 1) Steel -4.1% 2) Oil Service -3.5% 3) Regional Banks -3.0%
Stocks Falling on Unusual Volume: 
  • ESAB, DK, ETN, APA, BILI, SQM, CVBF, IR, BX, ASO, HUBB, DAWN, TFC, RAPT, JCI, FLR, SLG, FRC, BHF, PLUG, ZION, CMA, ALLE, WING, CAT, KEY, TT, VKTX, TGLS, LNC, XRX, CARR, NEO, EVA, MPC, CLF, X, CALM, DINO, HEES, NUE, WCC, ATKR, TH, PBF, PKX, NAPA, VLO, SDRL, WIRE, TITN, URI, STLD, DWAC, HRI, WSC, IGMS, CVI, TEX, AYI, MTW, ZIM and AI
Stocks With Unusual Put Option Activity:
  • 1) PCT 2) AI 3) BUD 4) UWMC 5) CAG
Stocks With Most Negative News Mentions:
  • 1) ONCT 2) AI 3) AMC 4) STEM 5) SWK
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Growth -.5%
Sector Outperformers:
  • Giold & Silver +3.1% 2) Medical Equipment +.4% 3) Utilities +.4%
Stocks Rising on Unusual Volume:
  • EHC, WWE, RPD, LSI and EXR
Stocks With Unusual Call Option Activity:
  • 1) BCLI 2) FYBR 3) BTG 4) SONO 5) EDR
Stocks With Most Positive News Mentions:
  • 1) AVAV 2) EHC 3) RFL 4) BFLY 5) CDLX

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

Earnings of Note 
Company/Estimate 

Before the Open: 
  • (CAG)/.64
  • (SCHN)/.19
  • (SMPL)/.30
After the Close: 
  • None of note

Economic Releases

8:15 am EST
  • The ADP Employment Change for March is estimated at 210K versus 242K in Feb. 
8:30 am EST
  • The Trade Balance for Feb. is estimated at -$68.8B versus -$68.3B in Jan.
9:45 am EST
  • S&P Global US PMI revisions.
10:00 am EST
  • The ISM Services Index for March is estimated to fall to 54.4 versus 55.1 in Feb.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,611,860 barrels versus a -7,489,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,910,710 barrels versus a -2,904,000 barrel decline the prior week. Distillate inventories are estimated to fall by -719,710 versus a +281,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.24% versus a +1.7% gain prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China Services PMI report, weekly MBA Mortgage Applications report, (FDX) Drive Investor Update and the (WM) investor day 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 +8.4% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 7.5 -.1
  • 9 Sectors Declining, 2 Sectors Rising
  • 20.9% of Issues Advancing, 76.9% Declining
  • 38 New 52-Week Highs, 22 New Lows
  • 45.5%(-2.7%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 56.0 -2.0
  • Bloomberg Global Risk-On/Risk-Off Index 53.8 -1.0%
  • Russell 1000: Growth/Value 16,081.5 +.63%
  • Vix 19.6 +5.4%
  • Total Put/Call 1.09 +18.5%
  • TRIN/Arms 1.15 -1.71%