Stocks Modestly Higher into Afternoon on US Economic Soft-Landing Hopes, Loosening US Financial Conditions, Diminished European Debt Angst, Commodity/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.7 -1.5%
• DJIA Intraday % Swing .52%
  
• Bloomberg Global Risk On/Risk Off Index 55.4 +4.2%

• Euro/Yen Carry Return Index 152.2 +.47%

• Emerging Markets Currency Volatility(VXY) 11.5 -1.0%

• CBOE S&P 500 Implied Correlation Index 32.7 +.28% 

• ISE Sentiment Index 115.0 +13.0 points
  

• Total Put/Call .87 -16.4%

• NYSE Arms .79 +11.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.8 -1.98%
  

• US Energy High-Yield OAS 370.1 -2.2%
• Bloomberg TRACE # Distressed Bonds Traded 380.0 -45
  

• European Financial Sector CDS Index 99.8 -4.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 396.1 -4.3%
  

• Italian/German 10Y Yld Spread 184.0 basis basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 130.1 -1.8%
  

• Emerging Market CDS Index 237.9 -1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.89 +.09%

• 2-Year Swap Spread 32.0 basis points -1.25 basis points
  

• TED Spread 21.75 basis points -22.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 +3.75 basis points
  
• MBS  5/10 Treasury Spread 165.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 691.0 +2.0 basis points
  
• Avg. Auto ABS OAS 86.0 -7.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.2%
• 3-Month T-Bill Yield 4.95% unch.
  

• China Iron Ore Spot 118.4 USD/Metric Tonne -1.2%
• Dutch TTF Nat Gas(European benchmark) 43.7 euros/megawatt-hour +1.3%

• Citi US Economic Surprise Index 29.7 -.6 point

• Citi Eurozone Economic Surprise Index 52.0 -.3 point
  

• Citi Emerging Markets Economic Surprise Index 21.6 -3.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.10 +.05:  Growth Rate +1.7% +.1 percentage point, P/E 18.2 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.29% unch.
  
• Bloomberg US Financial Conditions Index -.03 +4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.01 +6.0 basis points
  
• US Yield Curve -62.5 basis points (2s/10s) -3.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.17% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.60% unch.: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.29 +1.0 basis point
  
• Highest target rate probability for June 14th FOMC meeting: 68.9%(-1.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 44.6%(-.2 percentage point) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +191 open in Japan 
• China A50 Futures: Indicating +50 open in China

• DAX Futures: Indicating +167 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.2%
  

Sector Underperformers:

• 1) Software -1.5% 2) Internet -.8% 3) Networking -.8%

Stocks Falling on Unusual Volume: 

• MRNA, BEKE, IGMS, MDB, CYBR, BRZE, NAAS, SNOW and ADTN
  

Stocks With Unusual Put Option Activity:

• 1) KGC 2) APRN 3) PARA 4) VRE 5) BUD
  

Stocks With Most Negative News Mentions:

• 1) ADTN 2) TLRY 3) CTLT 4) VORB 5) BUD
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.9%
  

Sector Outperformers:

• Steel +3.6% 2) Homebuilders +3.2% 3) Airlines +3.0%

Stocks Rising on Unusual Volume:

• EBIX, TGTX, RIOT, MARA, SWAV, KMX, MSTR, SMTC, WHR, FHI and CARR
  

Stocks With Unusual Call Option Activity:

• 1) WW 2) NGD 3) PHM 4) KMX 5) TGTX

Stocks With Most Positive News Mentions:

• 1) WW 2) NCMI 3) BKD 4) KMX 5) ZFOX
  

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: 

• (APOG)/.85
• (BBBY)/-1.77
  

After the Close: 

• (SPWH)/.29
  

Economic Releases

8:30 am EST

• The CPI MoM for March is estimated to rise +.2% versus a +.4% gain in Feb.
• The CPI Ex Food and Energy MoM for March is estimated to rise +.4% versus a +.5% gain in Feb.
• The CPI YoY for March is estimated to rise +5.1% versus a +6.0% gain in Feb.
• The CPI Ex Food and Energy YoY for March is estimated to rise +5.6% versus a +5.5% gain in Feb.
• Real Avg. Weekly Earnings YoY for March.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,038,670 barrels versus a -3,739,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,629,170 barrels versus a -4,119,000 barrel decline the prior week. Distillate inventories are estimated to fall by -509,000 barrels versus a -3,632,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.35% versus a -.7% decline prior.

2:00 pm EST

• The Monthly Budget Statement for March is estimated at -$313.5B versus -$192.6B in Feb.
• March 22nd FOMC Meeting Minutes
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Money Supply report, weekly MBA Mortgage Applications report, 10Y T-Note auction, (GBX) investor day, (COP) analyst meeting and the (WBD) streaming press event could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• Volume Running -8.1% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.2 +1.0
  
• 3 Sectors Declining, 8 Sectors Rising
• 71.7% of Issues Advancing, 25.4% Declining
• 28 New 52-Week Highs, 7 New Lows
• 46.1%(+4.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 59.0 +4.0
  
• Bloomberg Global Risk-On/Risk-Off Index 55.3 +3.9%
  
• Russell 1000: Growth/Value 15,747.8 -.83%
  
• Vix 19.1 +.5%
• Total Put/Call .85 -18.3%
• TRIN/Arms .77 +8.5%
  

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 132.5 +.25 basis point. 

• China Sovereign CDS 75.25 +1.5 basis points. 
• China Iron Ore Spot 116.1 USD/Metric Tonne -1.1%.

• Bloomberg Emerging Markets Currency Index 47.6 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 53.9 +1.4%. 
• Bloomberg US Financial Conditions Index -.18 -11.0 basis points.
  
• Volatility Index(VIX) futures 21.2 -.26%.
• Euro Stoxx 50 futures +.80%.

• S&P 500 futures +.10%.

• NASDAQ 100 futures +.01%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial 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.