Stocks Modestly Higher into Afternoon on US Soft-Landing Hopes, Dollar Weakness, Less European/Emerging Markets/US High-Yield Debt Angst, Pharma/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.6 -2.5%
• DJIA Intraday % Swing .80%
  
• Bloomberg Global Risk On/Risk Off Index 54.7 -1.0%

• Euro/Yen Carry Return Index 153.2 +.53%

• Emerging Markets Currency Volatility(VXY) 11.4 -.7%

• CBOE S&P 500 Implied Correlation Index 33.1 +.24% 

• ISE Sentiment Index 116.0 +5.0 points
  

• Total Put/Call .91 -9.0%

• NYSE Arms 1.72 +109.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.8 -1.7%
  

• US Energy High-Yield OAS 370.92 -.19%
• Bloomberg TRACE # Distressed Bonds Traded 365.0 -15
  

• European Financial Sector CDS Index 97.5 -2.3% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 386.3 -2.6%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 126.8 -1.9%
  

• Emerging Market CDS Index 233.4 -1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.91 +.07%

• 2-Year Swap Spread 31.0 basis points -1.0 basis point
  

• TED Spread 23.25 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread 158.0 -7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 691.0 unch.
  
• Avg. Auto ABS OAS 96.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 +.24%
• 3-Month T-Bill Yield 4.97% +2.0 basis points
  

• China Iron Ore Spot 117.4 USD/Metric Tonne -.7%
• Dutch TTF Nat Gas(European benchmark) 42.9 euros/megawatt-hour -1.9%

• Citi US Economic Surprise Index 29.2 -.5 point

• Citi Eurozone Economic Surprise Index 50.70 -1.3 points
  

• Citi Emerging Markets Economic Surprise Index 22.2 +.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.06 -.04:  Growth Rate +1.6% -.1 percentage point, P/E 18.2 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.28% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .00 +10.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.04 -3.0 basis points
  
• US Yield Curve -57.5 basis points (2s/10s) +5.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.17% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% -2.0 basis points: CPI YoY +5.12% -10.0 basis points
  
• 10-Year TIPS Spread 2.31 +2.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 67.2%(-2.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 47.5%(+1.4 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +37 open in Japan 
• China A50 Futures: Indicating -10 open in China

• DAX Futures: Indicating +169 open in Germany

Portfolio:

• Higher:  On gains in my industrial/medical/utility/tech sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.3%
  

Sector Underperformers:

• 1) Airlines -2.6% 2) Retail -1.6% 3) Social Media -1.3%

Stocks Falling on Unusual Volume: 

• VNO, HTZ, M, SYY, AI, BMBL, JWN, SQ, DEI, ACDC, NCLH, SYM, ACDC, TROX, FUTU, TCOM, ADTN, GNL, BABA, BIPC, KMX, PDD, PLCE, TGTX, UAL, JD, VTS, ATAT, GDS, BMEA, CAR, AAL, PTON, CRUS and CUTR
  

Stocks With Unusual Put Option Activity:

• 1) VRAY 2) BUD 3) CHPT 4) WW 5) ALK
  

Stocks With Most Negative News Mentions:

• 1) CRUS 2) AAL 3) AUDC 4) ANF 5) KALU
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth unch.
  

Sector Outperformers:

• Shipping +1.0% 2) Cyber Security +.9% 3) Pharma +.8%

Stocks Rising on Unusual Volume:

• ARWR, GTLS, NATI, MDB, CNM, TRIN and FTV
  

Stocks With Unusual Call Option Activity:

• 1) NATI 2) PPL 3) VRAY 4) INMD 5) NU

Stocks With Most Positive News Mentions:

• 1) HTCR 2) MDB 3) SPNT 4) CFLT 5) INMD
  

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: 

• (DAL)/.31
• (FAST)/.51
• (PGR)/1.35
  

After the Close: 

• (WAFD)/1.07
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 235K versus 228K the prior week.
• Continuing Claims are estimated to rise to 1835K versus 1823K prior.
• PPI Final Demand MoM for March is estimated unch. versus a -.1% decline in Feb.
• PPI Ex Food and Energy MoM for March is estimated to rise +.2% versus unch. in Feb.
• PPI Final Demand YoY  for March is estimated to rise +3.0% versus a +4.6% gain in Feb.
• PPI Ex Food and Energy YoY for March is estimated to rise +3.4% versus a +4.4% gain in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Australian Employment report, 30Y T-Bond auction and the weekly EIA natural gas inventory report 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 -7.9% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.3 +.1
  
• 5 Sectors Declining, 6 Sectors Rising
• 51.7% of Issues Advancing, 44.6% Declining
• 45 New 52-Week Highs, 13 New Lows
• 47.2%(+2.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 62.0 +3.0
  
• Bloomberg Global Risk-On/Risk-Off Index 54.9 -.6%
  
• Russell 1000: Growth/Value 15,755.7 -.02%
  
• Vix 19.0 -.7%
• Total Put/Call .81 -19.0%
• TRIN/Arms 2.20 +168.2%
  

Wednesday Watch

Evening Headlines

Bloomberg:       

• IMF Warns It’s Too Soon to Sound All-Clear on Financial Turmoil.
• China 10-Year Bond Yield Drops to Lowest Since November.
• Asia Risks Losing Most From Rising ‘Geofragmentation,’ IMF Warns.
• Asia Stocks Rise, Dollar Steady Before US CPI Data: Markets Wrap.
  
• Russia’s Murky Measures Keep Its Oil Flowing Despite Sanctions.
• Oil Steadies After Surge With Supplies and Stockpiles in Focus.
• Inflation Data Will Shatter the Stock Market Calm, Goldman Partner Warns.
• Wells Fargo’s Harvey Warns S&P 500 Is Set for a 10% Correction.
• Best Pre-Earnings Stock Rally Since 2009 Sets High Bar for Firms.
• Bank Failures Start Getting Cited as Risk Factors After SVB Collapse.
• Traders Are Betting Against Airlines at Highest Rate Since Pandemic.
• Fed Officials Signal Divide Over Whether to Hike Rates Again.
• Big Banks That Shored Up First Republic Pushed to Boost Reserves.
• Fed’s Harker Is Prepared to Do More If Needed to Curb Inflation.
• Fed’s Kashkari Sees Signs of Calm Restored to Banking Sector.

Wall Street Journal:

• Ernst & Young Halts Breakup Plan.
• Bank Collapses Test FDIC’s ‘Standby CEOs’.
• U.S. Officials Haven’t Been Allowed to Visit Evan Gershkovich.
• Philly, Fraud and ‘Equity’ Gone Wrong. The feds steer billions to ‘disadvantaged’ firms, and one analysis says fraud is ‘pervasive.’ 
• New York Police Plan to Deploy Robotic Dogs.
• Next Wave of Remote Work: Outsourcing Jobs Overseas.

Fox News:

• Fire at recycling plant could 'burn for days' as thousands evacuate area near massive blaze.
• Tennessee Democrat's transformation from college to now goes viral on social media.
• Biden admin plans to cut water supplies to western states despite drought conditions.

CNBC.com:

• Google drops vaccine requirement to enter buildings, says ‘world is in a very different place’.
• Walmart chases higher profits powered by warehouse robots and automated claws.
• Banks in ‘more precarious situation’ creating risks for global growth, IMF chief economist warns.
• IMF cuts GDP forecasts, says global economy heading for weakest growth since 1990.
  

MarketWatch:

• ShotSpotter rebrands following stock’s tumble after new Chicago mayor elected.
• Most Americans aren’t banking on Social Security.
• Sinking Apple Mac sales lead the pack in worst quarterly drop ever for PC shipments.
• Fed should get interest rates above 5% and sit there, Harker says.

Zero Hedge:

• Watch: Body Cam Video From Officers Responding to Louisville Rampage.
• Walmart Abandons Unprofitable Chicago Stores After Investing "Hundreds Of Millions" In City. 
• Liftoff Imminent: China Injects Record Credit To Kickstart Economy.
• Online Grocery Prices Up 10.3 Percent In March As Inflation Continues To Bite.
• Blackstone Raises $30 Billion For "Largest Ever" Real Estate Drawdown Fund To Capitalize On Commercial Real Estate Crisis.
• IRS, Americans Unprepared To Shoulder Burden Of New Tax Laws, Republicans Warn.
• Weight Watches Parent's Stock Soars Again On Obesity-Drug, Goldman Turns Bull.
• Dangerous Overreach In Manhattan And Tennessee.
• 22-Year-Old National Guard Soldier Suffers Two Heart Attacks, Neurological Issues After Moderna Vax.
• Bragg Sues Jim Jordan To Stop 'Brazen And Unconstitutional' Attack On Trump Prosecution.
• US Deems WSJ Reporter 'Wrongfully Detained' - Paving Way For Possible Swap.
• Biden Signs Bill Formally Ending COVID-19 Public Health Emergency.
• US stocks were choppy and in tight ranges Tuesday with trepidation ahead of Wednesday's CPI and FOMC minutes; Crude prices rip higher - Newsquawk Asia-Pac Market Open.
• Justice Perverted: We Need A New Magna Carta.
• Stocks chop in cautious trade ahead of CPI and FOMC minutes - Newsquawk US Market Wrap.
• Biden White House Played Role In FBI Raid On Trump’s Mar-a-Lago Home: Documents.
• Stocks Squeezed Before Late-Day ODTE Profit Taking As Bitcoin Storms To 10 Month Highs.

Newsmax:       

• Gov. Noem: Bragg 'Malfeasance' 'So Far Out of Line'.
• Huckabee: If 1/6 Was Insurrection, So Was Tenn. Protest.
• Rep. Hunt: Biden's Blaming Is 'Opposite of Leadership'.

TheGatewayPundit.com:

• BREAKING: LEAKED US DEFENSE DOCUMENTS SHOWS WESTERN FORCES ON THE GROUND IN UKRAINE! …And Countries ARE NAMED in Leaked Document!
• Hawley Accuses Merrick Garland of Lying Under Oath About the FBI Not Targeting Catholic Parishes.
• Maryland School District Removes Parental Right to Opt-Out of Certain Curriculum, Makes LGBTQ-Themed Books Required Reading.
• SHOCKING: On Easter Sunday FTX CEO Releases Its Assessment of FTX’s Lack of Cyber, Financial, and Internal Accounting Controls.
• Feds’ Foreign-Corruption Double Standard: They Protected Bidens Even as They Bore Down on Trumpworld.
• The Japanese Substance In The “Top Position” As Therapy For Post-Vaccine and Post-COVID Syndromes — Dr. Peter McCullough (VIDEO).
• EXCLUSIVE: Was CIS Using “Albert Censors” to Steal States’ Data to Use in Nefarious Ways in 2020 Election?
• PRAY For Critically Wounded 26-Yr-Old Hero Louisville Cop, Nicholas Wilt, Who Was Shot In The Head After “Running toward the shooter”—Graduated From Police Academy Only Two Weeks Ago [POLICE SCANNER AUDIO].
• Louisiana State Rep. Jeremy LaCombe is Third Democrat to Switch to Republican Party in a Month.

The Epoch Times:

• Shanghai’s Commercial Attractiveness Wanes as a Population Crisis Emerges.
• China Sends 91 Warplanes, 12 Naval Vessels on Final Day of Taiwan Drills.

Twitter: 

• @songpinganq - The payroll of all civil servants and the employees of all state-owned enterprises in China's Suzhou city will be paid with CBDC from April 2023.
• @PhilHollowayEsq - Bud Light suffers bloodbath as longtime and loyal consumers revolt against transgender campaign “Sales of Anheuser-Busch bottled products dropped 30% over the past week, while draught beer plummeted 50%”.
• @charliebilello - Loan availability for Small Businesses fell sharply last month, worst levels in over a decade. (graph) The average interest rate on US credit card balances has crossed above 20%. With data going back to 1994, that's the highest rate we've ever seen, and is 5.5% above the rate from just a year ago.
• @FoxNashville - DRAG: The popular toy brand, Build-A-Bear, has come out with a drag queen inspired teddy bear.
• @zerohedge - Small Biz Saying Good Time to Expand Lowest Since June 1980. (graph) JOLTS is still overestimating the jobs-workers gap by ~1MM, per Goldman estimates. (graph)
• VigilantFox - @TuckerCarlson Questions the Role of Psychotropic Medications Following Louisville Bank Shooting " ... the effect of pharmaceuticals on mass shootings. Is anyone talking about that? Can we get a tox screen possibly? Are we allowed to ask that, or does Pfizer not want us to?" (video)
• @rawsalerts - Multiple agencies are on scene to a massive dairy farm explosion that took place yesterday evening. (video) 
• @ianmSC - Despite their lockdowns, mask mandates, passports and exceptionally highly vaccination and booster rates, the mortality rate in New Zealand skyrocketed in 2022. Wonder when the media will be explaining this after they praised for New Zealand for "eliminating" and "beating" COVID.
• @kylenabecker - According to a recent report, distributors are “spooked” by the company’s decision to market @BudLight with transgender blogger Dylan Mulvaney.
  

OpenVAERS:  

• VAERS US COVID Vaccine Adverse Event Reports. 947,487 Reports(+1,667 from prior week) Through March 24th, 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 -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 128.25 -4.25 basis points. 

• China Sovereign CDS 70.75 -4.5 basis points. 
• China Iron Ore Spot 118.75 USD/Metric Tonne -.88%.

• Bloomberg Emerging Markets Currency Index 47.7 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 55.7 +1.0%. 
• Bloomberg US Financial Conditions Index -.14 -4.0 basis points.
  
• Volatility Index(VIX) futures 21.2 -.26%.
• Euro Stoxx 50 futures -.07%.

• S&P 500 futures +.04%.

• NASDAQ 100 futures +.03%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher.  The Portfolio is 50% net long heading into the day.