Stocks Slightly Higher into Final Hour on Fed Rate-Hike Pause Hopes, Dollar Weakness, Short-Covering, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.8 +.2%
• DJIA Intraday % Swing .63%
  
• Bloomberg Global Risk On/Risk Off Index 52.9 +.9%

• Euro/Yen Carry Return Index 156.6 -.31%

• Emerging Markets Currency Volatility(VXY) 9.91 +.2%

• CBOE S&P 500 Implied Correlation Index 34.2 -.47% 

• ISE Sentiment Index 109.0 +22.0 points
  

• Total Put/Call .95 -6.9%

• NYSE Arms .99 -34.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.8 +.77%
  

• US Energy High-Yield OAS 405.9 +1.3%
• Bloomberg TRACE # Distressed Bonds Traded 413.0 +22.0
  

• European Financial Sector CDS Index 103.0 +.29% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 374.6 +1.6%
  

• Italian/German 10Y Yld Spread 187.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 133.0 +2.4%
  

• Emerging Market CDS Index 241.19 -.67%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.7 -.17%

• 2-Year Swap Spread 29.5 basis points -2.0 basis points
  

• TED Spread 14.5 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.0 +.5 basis point
  
• MBS  5/10 Treasury Spread 163.0 -5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 702.0 +3.0 basis points
  
• Avg. Auto ABS OAS 93.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.44%
• 3-Month T-Bill Yield 5.20% +6.0 basis points
  

• China Iron Ore Spot 100.5 USD/Metric Tonne -.77%
• Dutch TTF Nat Gas(European benchmark) 36.8 euros/megawatt-hour -2.0%

• Citi US Economic Surprise Index 16.6 +4.1 points

• Citi Eurozone Economic Surprise Index 12.6 +.1 point
  

• Citi Emerging Markets Economic Surprise Index 35.1 +.4 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.5 +.12:  Growth Rate +2.1% -.1 percentage point, P/E 18.1 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• Bloomberg US Financial Conditions Index .05 +14.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.59 +1.0 basis point
  
• US Yield Curve -54.75 basis points (2s/10s) -.5 basis point
• US Atlanta Fed 2Q GDPNow Forecast +1.84% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.66% unch.: CPI YoY +5.19% unch.
  
• 10-Year TIPS Spread 2.22 +2.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 77.1%(-5.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 52.5%(-3.6 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -308 open in Japan 
• China A50 Futures: Indicating -101 open in China

• DAX Futures: Indicating +139 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 25% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value +.2%
  

Sector Underperformers:

• 1) Restaurants -2.7% 2) Gambling -1.1% 3) Energy -1.0%

Stocks Falling on Unusual Volume: 

• DUOL, WBA, YUM, VNOM, DEI, MLCO, UTHR, TRI, SHC, NICE, EAT, DCPH, SMG, FROG, KRP, HESM, TRIP, MPC, PGR, ADBE, WK, SFM, SPWR, DENN, VOYA, TCOM, CVI, NBIX, PATH, TT, MKTX, LYTS, CLH, MSTR, GTLB, SBGI, DGRG, ASAI, PCRX, RIOT, ADNT, FIVN, ASH, VIRT, SPR, AMCR, SBUX, AMD, HPK, ANDE, WIX, SSTK, FVRR, AVNS, SQSP, SPT, EL, MRCY, NRDS and IEP
  

Stocks With Unusual Put Option Activity:

• 1) RSP 2) TRIP 3) EL 4) IEP 5) CHGG
  

Stocks With Most Negative News Mentions:

• 1) IEP 2) EL 3) SPR 4) LCIN 5) NBIX
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.3%
  

Sector Outperformers:

• Computer Hardware +2.9% 2) Airlines +2.4% 3) Regional Banks +2.1%

Stocks Rising on Unusual Volume:

• IMGN, RUTH, QTRX, SMCI, VREX, CHGG, COCO, GNRC, CWH, BLDR, BFAM, OHI, WING, CABA, LTHM, DICE, INBX, SITE, LLY, LPX, CLX, PEN, INGR, PACB, KHC, CATY, DYN, FRSH and DIN
  

Stocks With Unusual Call Option Activity:

• 1) CHGG 2) IEP 3) EL 4) FAST 5) FANG

Stocks With Most Positive News Mentions:

• 1) IMGN 2) SMCI 3) MTRN 4) RXO 5) ROCK
  

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: 

• (ATI)/.48
• (AEP)/1.12
• (BUD)/.60
• (APTV)/.91
• (MT)/.80
• (BDX)/2.75
• (BWA)/1.11
• (CAH)/1.49
• (CARS)/.44
• (CGNX)/.09
• (COP)/2.07
• (DDOG)/.24
• (DISH)/.39
• (H)/.51
• (ICE)/1.40
• (IRM)/.68
• (ITRI)/.11
• (ITT)/1.12
• (JLL)/1.76
• (K)/1.00
• (MLM)/1.02
• (MRNA)/-1.74
• (PZZA)/.67
• (PH)/5.01
• (PTON)/-.48
• (PENN)/.36
• (PBI)/.00
• (PPL)/.45
• (PWR)/1.12
• (REGN)/9.46
• (RCL)/-.69
• (SHAK)/-.08
• (SHOP)/-.04
• (SWK)/-.74
• (STWD)/.50
• (VMC)/.62
• (W)/-1.71
• (XPO)/.46
• (ZTS)/1.25
  

After the Close: 

• (AAON)/.53
• (AES)/.22
• (AIG)/1.42
• (AAPL)/1.43
• (BGS)/.26
• (SQ)/.34
• (BKNG)/10.79
• (CVNA)/-1.91
• (CHUY)/.37
• (CRUS)/.84
• (COIN)/-.87 
• (ED)/1.57
• (DASH)/.14
• (DKNG)/-.84
• (DBX)/.36
• (LOCO)/.11
• (EOG)/2.49
• (EXPE)/.03
• (FTNT)/.29
• (GT)/-.24
• (LYFT)/-.08
• (MTZ)/-.57
• (MCHP)/1.62
• (MNST)/.34
• (NCR(/.49
• (POST)/.81
• (RMAX)/.27
• (RRR)/.49
• (RDFN)/-1.01
• (TXRH)/1.36
• (TRUP)/-.04
• (YELP)/.40
  

Economic Releases

7:30 am EST:

• Challenger Job Cuts YoY for April.
  

8:30 am EST:

• The Trade Balance for March is estimated at -$63.1B versus -$70.5B in Feb.
• Non-Farm Productivity for 1Q is estimated to fall -2.0% versus a +1.7% gain in 4Q.
• Unit Labor Costs for 1Q are estimated to rise +5.5% versus a +3.2% gain in 4Q.
• Initial Jobless Claims for last week are estimated to rise to 240K versus 230K the prior week.
• Continuing Claims are estimated to rise to 1865K versus 1858K prior.
  

Upcoming Splits

• (SMH) 2-for-1
  

Other Potential Market Movers

• The ECB decision, Australia Trade Balance report, weekly EIA natural gas inventory report, (SCS) investor day and the (NET) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running -9.5% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.2 +.6
  
• 8 Sectors Declining, 3 Sectors Rising
• 55.7% of Issues Advancing, 41.5% Declining
• 57 New 52-Week Highs, 51 New Lows
• 39.7%(+3.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.0 +3
  
• Bloomberg Global Risk-On/Risk-Off Index 52.6 +.1%
  
• Russell 1000: Growth/Value 16,130.0 +.4%
• 1-Day Vix 21.6 +9.1%
  
• Vix 18.5 +4.0% 
  
• Total Put/Call .79 -22.6%
• TRIN/Arms 1.20 -20.5%
  

Wednesday Watch

Evening Headlines

Bloomberg:   

• Japan, France to Cooperate to Develop Next-Gen Nuclear Reactors: Sankei.
• Britain’s Housing Slowdown Leaves More Homes on the Market.
• New Zealand Jobless Rate Holds Steady, Wage Inflation Climbs.
• Copper Mine Flashes Warning of ‘Huge Crisis’ for World Supply. 
• Asia Stocks Set to Drop as Bank Woes Hit US Shares: Markets Wrap.
• Oil Steadies After Slumping 5% as Demand Concerns Escalate.
• San Francisco Woes Multiply as Nordstrom Joins Retailers Fleeing.
• Canyon’s Friedman Sees ‘Carnage’ for Some Real Estate Sectors.
• A Short-Term Fix Looks More Likely as US Debt-Limit Deadline Looms.
• Druckenmiller Warns US Debt Crisis Worse Than He Imagined.
• The Shortage That Could Ruin Bourbon Industry.
• Milken Latest: KKR’s Stavros Sees Cost Troubles in Senior Debt.
• Commercial Real Estate, Big Tech Prove Toxic Mix. 
• Short Sellers Tightened Grip on Regional Banks in Runup to Rout.
• Regional Bank Shares Plunge on Fear of More Rescues to Come.
• New Jersey Is the New Hot Spot for Big Businesses to Go Broke.

Zero Hedge:

• "We've Never Seen Such A Dramatic Shift": Bud Light Hopes New Ad Blitz Can Overcome Corporate Suicide.
• "We Want More Money": Hollywood Writers Strike, Threatens Production Of Late-Night Shows.
• Pornhub Blocks Access In Utah After State Passes New Age Verification Law.
• Biden Sending 1,500 Troops To Southern Border To Deal With Surge Of Illegal Immigrants.
• Biden's Game Of Chicken: "We Won't See A Debt Ceiling Solution Until The Market Panics".
• Blaming Conservatives For Collapse: Damned If They Do, Damned If They Don’t On The Debt Ceiling.
• DeSantis Signs Bill To Authorize Death Penalty For Child Rapists In Florida.
• US stocks declined on the eve of the FOMC amid regional bank losses - Newsquawk Asia-Pac Market Open.
• MOVEs are back.
• Bank Failures - A Push For CBDC?
• Murdochs Spoke With Zelenskyy Weeks Before Firing Anti-War Host Tucker Carlson.
• Major Banks Could Be Liable For Jeffrey Epstein Sex Trafficking: Judge.
• WTI Holds Ugly Losses Despite 3rd Weekly Crude Draw In A Row.
• Risk off as regional banks slide while JOLTS data falls ahead of Fed - Newsquawk US Market Wrap.
• Fooling Us With Fake Stats: Household Net Worth.
• Crystal Balls, Soothsayers, And AI; Oh My!
• Bonds & Bullion Burst Higher, Banks Battered As JOLTs Plunge Ahead Of Jay Powell.

Wall Street Journal:

• Regional Bank Stocks Close at Lowest Since 2020.
• Why Washington Let the Nation’s Biggest Bank Get Bigger.
• Job Openings Near Two-Year Low.
• Switzerland Wants Children to Eat Less Chocolate, More Insects.

CNBC.com:

• PacWest falls more than 20% as regional bank stocks slide to new lows.
• AMD revenue drops 9% as PC chip sales decline sharply.
• Ford cutting price of electric Mustang Mach-E by thousands of dollars.

MarketWatch:

• Ford stock heads lower after auto maker’s EV business posts loss Fed may pause ‘for an extended period of time’ after interest-rate hike, BlackRock’s Rick Rieder says.
• ‘AI for us is broader than cloud,’ AMD CEO tells analysts, but chip maker still needs PC recovery to improve margins; stock sinks.
• Icahn Enterprises sheds $4.5 billion of value as short seller Hindenburg puts Carl Icahn’s company in crosshairs.
• Starbucks stock sinks as new CEO sticks with predecessor’s forecast despite earnings beat.

Newsmax: 

• Tuberville: WH Labor Pick Lost $30B in COVID Fraud.
• Sen. Ron Johnson: Dems 'Intimidating' Justices Is a 'Travesty'.
• Paxton: Vax Maker Protection? Not in Texas.

Fox News:

• Reparations panel wants 'down payments' to Black residents, abolishing cash bail.
• Experts issue ominous warning over Biden's mortgage redistribution plan.

TheGatewayPundit.com:

• BREAKING: Attorneys for Gateway Pundit Including America First Legal File New Class Action Lawsuit Attacking the Heart of Internet Election Censorship in America.
• OUCH! Costco Is Almost Giving Bud Light Away, While Coors and Miller Lite Pallets Are EMPTY in Sam’s Club and Anheuser-Busch Pallets are Full! [VIDEO].
• US Regional Bank Stocks Crash – PacWest Down 30%, Western Alliance Down 25%, Metropolitan Bank Down 21%.
• Tucker Carlson Receives $100 Million Offer and Several Additional Perks to Join “New Media” Company.
• Democrat Lawmaker Lois Frankel Sold First Republic Stock Before It Crashed by 80% – Bought JPMorgan Stock Which Just Bought First Republic Instead.
• Karine Jean-Pierre Visibly Irritated After Reporter Asks Why Joe Biden Won’t Acknowledge the Existence of His 7th Grandchild (VIDEO).
• Biden’s Incompetent Secretary of Interior Says She is Unaware China Controls Critical Minerals Needed for Electric Vehicles (VIDEO).
• Border Patrol Readies for MASS INVASION as Joe Biden Opens Southern Border and Lifts Title 42 in 9 More Days – 1,500 Troops Sent to Border.
• Victor Davis Hanson Says FOX News Won’t be Able to Replace Tucker Carlson (VIDEO).
• Texas AG Ken Paxton Announces Investigation Against Pfizer, J&J, and Moderna Over Deceptive Practices.
  

The Epoch Times:

• GOP Officials Raise Alarm Over US Guardsman in TikTok Ad.

Twitter: 

• @zerohedge - *US TO SEND UKRAINE $300 MILLION IN MILITARY AID: AP. CRE property type exposure by bank.
  
• @saxena_puru - Probably nothing. (graph)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 953,415 Reports(+1,831 from prior week) Through April 14th, 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 -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 132.0 +2.5 basis points. 

• China Sovereign CDS 75.25 +3.0 basis points.
  
• China Iron Ore Spot 101.5 USD/Metric Tonne -.61%.

• Bloomberg Emerging Markets Currency Index 47.6 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 52.5 -.01%. 
• Bloomberg US Financial Conditions Index -.07 +1.0 basis point.
  
• Volatility Index(VIX) futures 21.4 -.4%.
• Euro Stoxx 50 futures +.45%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.05%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.