Stocks Reversing Slightly Higher into Afternoon on US Economic "Soft-Landing" Hopes, Earnings Outlook Optimism, Short-Covering, Healthcare/Gambling Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.9 -1.3%
• DJIA Intraday % Swing .50%
  
• Bloomberg Global Risk On/Risk Off Index 57.2 +.3%

• Euro/Yen Carry Return Index 153.9 -.02%

• Emerging Markets Currency Volatility(VXY) 10.0 +.1%

• CBOE S&P 500 Implied Correlation Index 33.3 +3.3% 

• ISE Sentiment Index 119.0 +48.0 points
  

• Total Put/Call .87 -11.2%

• NYSE Arms 1.34 -17.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.3 -.46%
  

• US Energy High-Yield OAS 376.51 -1.0%
• Bloomberg TRACE # Distressed Bonds Traded 423.0 +11
  

• European Financial Sector CDS Index 96.4 +.55% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 352.12 +.8%
  

• Italian/German 10Y Yld Spread 187.0 basis basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 127.8 +1.8%
  

• Emerging Market CDS Index 241.25 -.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.83 -.06%

• 2-Year Swap Spread 27.75 basis points -.75 basis point
  

• TED Spread 20.75 basis points +.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.5 -2.75 basis points
  
• MBS  5/10 Treasury Spread 164.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 693.0 -1.0 basis point
  
• Avg. Auto ABS OAS 94.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.07%
• 3-Month T-Bill Yield 5.05% -2.0 basis points
  

• China Iron Ore Spot 105.4 USD/Metric Tonne -2.5%
• Dutch TTF Nat Gas(European benchmark) 40.2 euros/megawatt-hour -1.0%

• Citi US Economic Surprise Index 32.1 +5.7 points

• Citi Eurozone Economic Surprise Index 32.8 -4.2 points
  

• Citi Emerging Markets Economic Surprise Index 31.8 unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.93 -.15:  Growth Rate +1.6% unch., P/E 18.3 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.27% +1.0 basis point
  
• Bloomberg US Financial Conditions Index .08 +1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index -4.28 -10.0 basis points
  
• US Yield Curve -62.0 basis points (2s/10s) -1.75 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 2.28 -1.0 basis point
  
• Highest target rate probability for June 14th FOMC meeting: 68.4%(+2.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 60.5%(+3.3 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +146 open in Japan 
• China A50 Futures: Indicating -22 open in China

• DAX Futures: Indicating +149 open in Germany

Portfolio:

• Higher:  On gains in my medical/utility 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:

• Small-Cap Value -.7%
  

Sector Underperformers:

• 1) Oil Service -2.1% 2) Regional Banks -2.0% 3) Electric Vehicles -1.8%

Stocks Falling on Unusual Volume: 

• NUE, TECK, VLO, MAG, LMND, JBHT, INDB, UBER, RF, TSM, WSC, MOS, SSL, OZK, BHP, SCCO, FIBK, FFIN, CLF, USB, KEY, ZIM, RIO, VALE, AMR, SLB, ATKR, MP, TFC, FCX, NSIT, ZION, ALV, MATX, AA, OSTK, GBCI, ALB, LTHM, EVBG, WRB, XMTR, ASUR and SQM
  

Stocks With Unusual Put Option Activity:

• 1) PZZA 2) QGEN 3) FLEX 4) LTHM 5) SQM
  

Stocks With Most Negative News Mentions:

• 1) BIG 2) ALB 3) EVBG 4) SQM 5) DISH
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.1%
  

Sector Outperformers:

• Pharma +1.2% 2) Biotech +1.0% 3) Gambling +.8%

Stocks Rising on Unusual Volume:

• EVCM, TMDX, SWAV, LEGN, XPO, MBI, NOVA, HCA, PG and T
  

Stocks With Unusual Call Option Activity:

• 1) IGT 2) LOVE 3) VRNS 4) BJRI 5) SNN

Stocks With Most Positive News Mentions:

• 1) WISH 2) MULN 3) BWEN 4) XPO 5) WDFC
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

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

Earnings of Note 
Company/Estimate 

Before the Open: 

• (BOH)/1.23
• (KO)/.64
• (PHG)/.08
  

After the Close: 

• (AMP)/7.21
• (BRO)/.81
• (CDNS)/1.25
• (CNI)/1.72
• (CLF)/-.14
• (CCK)/1.05
• (FRC)/.51
• (PKG)/2.27
• (AAN)/.29
• (WHR)/2.15
  

Economic Releases

8:30 am EST

• The Chicago Fed National Activity Index for March.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO report and RE/MAX Global Commercial Symposium 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 -13.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.7 +.9
  
• 7 Sectors Declining, 3 Sectors Rising
• 34.4% of Issues Advancing, 62.3% Declining
• 40 New 52-Week Highs, 30 New Lows
• 43.7%(-1.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.0 -5
  
• Bloomberg Global Risk-On/Risk-Off Index 57.2 +.2%
  
• Russell 1000: Growth/Value 15,821.4 -.06%
  
• Vix 17.4 +1.6%
• Total Put/Call .94 -4.1%
• TRIN/Arms 1.42 -12.4%
  

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 127.0 +1.75 basis points 

• China Sovereign CDS 72.5 +1.25 basis points
  
• China Iron Ore Spot 111.5 USD/Metric Tonne -3.1%.

• Bloomberg Emerging Markets Currency Index 47.7 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 57.5 +.7%. 
• Bloomberg US Financial Conditions Index -.02 -8.0 basis points.
  
• Volatility Index(VIX) futures 19.8 -.2%.
• Euro Stoxx 50 futures +.12%.

• S&P 500 futures +.04%.

• NASDAQ 100 futures +.16%.  

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 higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.