Tuesday Watch

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 121.5 -2.75 basis points. 

• China Sovereign CDS 67.0 -.25 basis point. 
• China Iron Ore Spot 117.0 USD/Metric Tonne +.2%.

• Bloomberg Emerging Markets Currency Index 47.7 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 58.7 +.9%. 
• Bloomberg US Financial Conditions Index .25 +6.0 basis points.
  
• Volatility Index(VIX) futures 19.7 +.63%.
• Euro Stoxx 50 futures +.19%.

• S&P 500 futures -.05%.

• NASDAQ 100 futures -.11%.  

Morning Preview Links

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

Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Fed "Higher for Longer" Worries, Dollar Strength, Energy/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.2 +.9%
• DJIA Intraday % Swing .36%
  
• Bloomberg Global Risk On/Risk Off Index 58.2 +1.5%

• Euro/Yen Carry Return Index 153.3 -.3%

• Emerging Markets Currency Volatility(VXY) 10.0 -.20%

• CBOE S&P 500 Implied Correlation Index 31.6 -.4% 

• ISE Sentiment Index 103.0 +11.0 points
  

• Total Put/Call 1.03 +14.4%

• NYSE Arms .95 +10.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.7 +.91%
  

• US Energy High-Yield OAS 362.91 +.24%
• Bloomberg TRACE # Distressed Bonds Traded 366.0 -1
  

• European Financial Sector CDS Index 94.7 -.39% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 355.1 -2.4%
  

• Italian/German 10Y Yld Spread 183.0 basis basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 122.3 -1.8%
  

• Emerging Market CDS Index 233.3 +.66%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.99 +.03%

• 2-Year Swap Spread 30.0 basis points -1.5 basis points
  

• TED Spread 27.75 basis points +2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 +1.0 basis point
  
• MBS  5/10 Treasury Spread 164.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 693.0 -1.0 basis point
  
• Avg. Auto ABS OAS 95.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 -.35%
• 3-Month T-Bill Yield 5.05% +5.0 basis points
  

• China Iron Ore Spot 117.0 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 41.1 euros/megawatt-hour -.05%

• Citi US Economic Surprise Index 39.1 +8.1 points

• Citi Eurozone Economic Surprise Index 43.8 -4.6 points
  

• Citi Emerging Markets Economic Surprise Index 23.9 -3.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.98 +.15:  Growth Rate +1.6% +.1 percentage point, P/E 18.3 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• Bloomberg US Financial Conditions Index .25 +8.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.13 -17.0 basis points
  
• US Yield Curve -61.0 basis points (2s/10s) -3.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.47% +30.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% unch.: CPI YoY +5.12% unch.
  
• 10-Year TIPS Spread 2.31 unch.
  
• Highest target rate probability for June 14th FOMC meeting: 64.0%(-2.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 53.7%(+6.0 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +3 open in Japan 
• China A50 Futures: Indicating -19 open in China

• DAX Futures: Indicating +121 open in Germany

Portfolio:

• Slightly Higher:  On gains in my medical/industrial sector longs and index hedges
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.4%
  

Sector Underperformers:

• 1) Energy -1.4% 2) Networking -1.3% 3) Semis -1.2%

Stocks Falling on Unusual Volume: 

• HDB, TALO, GOOG, GOOGL, AFYA, TFPM, BNTX, MARA, PAAS, UBS, CBRL, TER, KEYS, PARR, ASML, ALGM, MAG, MSTR, RVLV, BK, RIOT, HCM, MRNA, TRUP, STT and RBLX
  

Stocks With Unusual Put Option Activity:

• 1) IGV 2) STT 3) PTGX 4) AQN 5) BOX
  

Stocks With Most Negative News Mentions:

• 1) RBLX 2) STT 3) MANU 4) BK 5) TER
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%
  

Sector Outperformers:

• Shipping +2.1% 2) Alt Energy +1.7% 3) Electric Vehicles +1.1%

Stocks Rising on Unusual Volume:

• RXDX, MORF, PCVX, LIND, NRIX, VTYX, CLDX, CGEM, ENPH, ACLX, MTB, IOT, CTLT, KDNY, RARE and BTU
  

Stocks With Unusual Call Option Activity:

• 1) CTLT 2) TME 3) BNGO 4) BK 5) CVE

Stocks With Most Positive News Mentions:

• 1) PRST 2) RXDX 3) XPEV 4) MTB 5) NIO
  

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: 

• (BAC)/.83
• (BK)/1.11
• (CBSH)/.93
• (ERIC)/.69
• (GS)/8.06
• (JNJ)/2.51
• (LMT)/6.06
• (PLD)/1.22
• (SBNT)/3.88
  

After the Close: 

• (FHN)/.47
• (IBKR)/1.41
• (ISRG)/1.19
• (MRTN)/.27
• (NFLX)/2.87
• (OMC)/1.40
• (UAL)/-.73
• (WAL)/2.03
  

Economic Releases

8:30 am EST

• Housing Starts for March is estimated to fall to 1400K versus 1450K in Feb.
• Building Permits for March is estimated to fall to 1450K versus 1524K in Feb.
• NY Fed Services Business Activity for April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bowman speaking, China Industrial Production report, US weekly retail sales report and the (SIG) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -9.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.8 -.1
  
• 5 Sectors Declining, 6 Sectors Rising
• 54.9% of Issues Advancing, 41.4% Declining
• 46 New 52-Week Highs, 27 New Lows
• 46.6%(+2.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 unch.
  
• Bloomberg Global Risk-On/Risk-Off Index 58.3 +1.7%
  
• Russell 1000: Growth/Value 15,793.2 -.20%
  
• Vix 17.3 +1.3%
• Total Put/Call 1.03 +14.4%
• TRIN/Arms 1.04 +20.9%