Thursday Watch

Night Trading 

• Asian equity indices are -.50% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 125.25 +3.75 basis points 

• China Sovereign CDS 71.25 +4.25 basis points
  
• China Iron Ore Spot 116.0 USD/Metric Tonne -1.2%.

• Bloomberg Emerging Markets Currency Index 47.6 +-.01%.
• Bloomberg Global Risk-On/Risk Off Index 59.0 +.9%. 
• Bloomberg US Financial Conditions Index .14 -7.0 basis points.
  
• Volatility Index(VIX) futures 19.5 +.8%.
• Euro Stoxx 50 futures +.05%.

• S&P 500 futures -.24%.

• NASDAQ 100 futures -.39%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial 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 Higher into Afternoon on Loosening US Financial Conditions, Diminishing Regional Bank Contagion Fears, Earnings Outlook Optimism, Financial/Medical Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.4 -2.6%
• DJIA Intraday % Swing .42%
  
• Bloomberg Global Risk On/Risk Off Index 58.7 +1.0%

• Euro/Yen Carry Return Index 154.3 +.4%

• Emerging Markets Currency Volatility(VXY) 10.1 +.7%

• CBOE S&P 500 Implied Correlation Index 31.3 +.2% 

• ISE Sentiment Index 198.0 -10.0 points
  

• Total Put/Call .94 +4.4%

• NYSE Arms 1.08 +13.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 73.95 +.42%
  

• US Energy High-Yield OAS 364.26 +.77%
• Bloomberg TRACE # Distressed Bonds Traded 393.0 +7
  

• European Financial Sector CDS Index 92.7 +.19% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 347.96 +2.2%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 124.0 +2.1%
  

• Emerging Market CDS Index 237.5 +1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.95 -.01%

• 2-Year Swap Spread 29.25 basis points -1.25 basis points
  

• TED Spread 11.75 basis points -6.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 +.75 basis point
  
• MBS  5/10 Treasury Spread 169.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 694.0 +1.0 basis point
  
• Avg. Auto ABS OAS 95.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.31%
• 3-Month T-Bill Yield 5.12% unch.
  

• China Iron Ore Spot 116.9 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 40.3 euros/megawatt-hour -5.7%

• Citi US Economic Surprise Index 35.9 -1.0 point

• Citi Eurozone Economic Surprise Index 37.5 -.6 point
  

• Citi Emerging Markets Economic Surprise Index 32.7 unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.08 unch.:  Growth Rate +1.6% unch., P/E 18.4 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• Bloomberg US Financial Conditions Index .29 +9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.04 +2.0 basis points
  
• US Yield Curve -65.75 basis points (2s/10s) -2.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.48% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% unch.: CPI YoY +5.17% unch.
  
• 10-Year TIPS Spread 2.29 +1.0 basis point
  
• Highest target rate probability for June 14th FOMC meeting: 64.6%(+.8 percentage point) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 58.1%(+3.4 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1 open in Japan 
• China A50 Futures: Indicating +7 open in China

• DAX Futures: Indicating +145 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.4%
  

Sector Underperformers:

• 1) Steel -3.1% 2) Computer Hardware -3.0% 3) Networking -3.0%

Stocks Falling on Unusual Volume: 

• SPWR, MP, FFIV, QNST, OPRA, F, ENVX, ARW, OMC, FULT, UNH, ASAI, HUM, NFLX, CSCO, GGAL, XRX, TNP, AGL, IE, RIVN, SNX, XP, LAD, MOH, VALE, ELV, HLIT, TGS, BMA, RPCT, FOUR, RIOT, NSIT, EXTR and CDW
  

Stocks With Unusual Put Option Activity:

• 1) BEN 2) CIFR 3) FOUR 4) TSEM 5) WB
  

Stocks With Most Negative News Mentions:

• 1) XPEV 2) RIVN 3) CDW 4) EXTR 5) LAD
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.1%
  

Sector Outperformers:

• Medical Equipment +3.7% 2) Regional Banks +2.4% 3) Gambling +1.0%

Stocks Rising on Unusual Volume:

• WAL, LEGN, MCB, LUNR, ISRG, RLAY, ABT, UAL, PCVX and ACLX
  

Stocks With Unusual Call Option Activity:

• 1) BRBR 2) WRK 3) ZBH 4) ESTC 5) EXTR

Stocks With Most Positive News Mentions:

• 1) WAL 2) ISRG 3) PACW 4) MCB 5) LEGN
  

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: 

• (ALK)/-.48
• (AXP)/2.57
• (T)/.59
• (AN)/5.74
• (BMI)/.55
• (BX)/.96
• (CMA)/2.27
• (DHI)/1.91
• (FITB)/.79
• (GPC)/2.03
• (HTLD)/.18
• (HRI)/2.14
• (KEY)/.44
• (MAN)/1.63
• (MMC)/2.47
• (NUE)/3.89
• (PM)/1.34
• (POOL)/3.19
• (RAD)/-.77
• (SNA)/4.14
• (TSM)/7.43
• (TFC)/1.15
• (UNP)/2.57
  

After the Close: 

• (OZK)/1.38
• (CSX)/.43
• (KNX)/.81
• (PPG)/1.55
• (STX)/.21
• (SIVB)/4.17
• (VMI)/3.38
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 240K versus 239K the prior week.
• Continuing Claims are estimated to rise to 1825K versus 1810K prior.
• The Philly Fed Business Outlook for April is estimated to rise to -19.2 versus -23.2 in March.
  

10:00 am EST

• Existing Home Sales for March is estimated to fall to 4.5M versus 4.58M in Feb.
• The Leading Index for March is estimated to fall -.7% versus a -.3% decline in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Waller speaking, Fed's Bowman speaking, weekly EIA natural gas inventory report and the (RGLD) virtual investor update 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 -11.2% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.7 -.4
  
• 8 Sectors Declining, 3 Sectors Rising
• 34.7% of Issues Advancing, 62.3% Declining
• 34 New 52-Week Highs, 21 New Lows
• 44.7%(-2.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 -1
  
• Bloomberg Global Risk-On/Risk-Off Index 58.8 +1.1%
  
• Russell 1000: Growth/Value 15,796.9 +.03%
  
• Vix 16.5 -2.1%
• Total Put/Call .93 +3.3%
• TRIN/Arms 1.21 +27.4%