Stocks Slightly Lower into Final Hour on US Economic Data, Earnings Jitters, Technical Selling, Financial/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.5 -1.3%
• DJIA Intraday % Swing 1.0% +73.7%
  
• Bloomberg Global Risk On/Risk Off Index 59.5 +4.3%

• Euro/Yen Carry Return Index 172.0 -.06%

• Emerging Markets Currency Volatility(VXY) 7.63 -1.7%

• CBOE S&P 500 Implied Correlation Index 17.72 -3.2% 

• ISE Sentiment Index 135.0 -4.0
  

• Total Put/Call .94 -26.6%

• NYSE Arms 1.20 -16.7% 
• NYSE Non-Block Money Flow -$106.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 54.90 -1.0%
  

• US Energy High-Yield OAS 330.3 +.52%
• Bloomberg TRACE # Distressed Bonds Traded 344 +18
  

• European Financial Sector CDS Index 68.78 -.4% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 211.10 -.74%
  

• Italian/German 10Y Yld Spread 157.0 basis points -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 98.11 -2.6%
  

• Emerging Market CDS Index 174.3 -.79%
• Israel Sovereign CDS 119.0 +2.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.33 +.25%

• 2-Year SOFR Swap Spread -17.25 basis points -.75 basis point
  

• TED Spread 21.75 basis points n/a
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -1.0 basis point
  
• MBS  5/10 Treasury Spread 143.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 960.0 -6.0 basis points
  
• Avg. Auto ABS OAS 75.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.27 +.12%
• 3-Month T-Bill Yield 5.37% -1.0 basis point
  

• China Iron Ore Spot 132.4 USD/Metric Tonne -1.5%
• Dutch TTF Nat Gas(European benchmark) 30.8 euros/megawatt-hour -.4%

• Citi US Economic Surprise Index 8.1 +1.3 points

• Citi Eurozone Economic Surprise Index -15.90 +.1 point

• Citi Emerging Markets Economic Surprise Index 13.6 -2.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(21 of 500 reporting) +9.1% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.46 +.01:  Growth Rate +11.9% unch., P/E 19.5 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.04% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +0.0% -0.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 290.73 +.15: Growth Rate +36.3% +.1 percentage point, P/E 30.0 unch.
  
• Bloomberg US Financial Conditions Index .96 +12.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .49 +4.0 basis points
  
• US Yield Curve -34.0 basis points (2s/10s) +5.25 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.21% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 65.9% +.5 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +2.97% -35.0 basis points
  
• 10-Year TIPS Spread 2.23 +1.0 basis point
  
• Highest target rate probability for March 20th FOMC meeting: 68.1%(+3.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 1st meeting: 62.6%(+9.2 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +221 open in Japan 
• China A50 Futures: Indicating -57 open in China

• DAX Futures: Indicating +202 open in Germany

Portfolio:

• Slightly Lower:  On losses in my utility/consumer discretionary/biotech sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.0%
  

Sector Underperformers:

• 1) Utilities -1.9% 2) Regional Banks -1.9% 3) Alt Energy -1.9%

Stocks Falling on Unusual Volume: 

• HSBC, MSTR, MRUS, DB, ASPN, HUT, COIN, GCT, LPG, RXRX, MARA, RIOT, AAOI and CYTK
  

Stocks With Unusual Put Option Activity:

• 1) MQ 2) OIH 3) ICLN 4) AUPH 5) OPEN
  

Stocks With Most Negative News Mentions:

• 1) PLUG 2) DADA 3) EGRX 4) MVST 5) SMR
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.1%
  

Sector Outperformers:

• 1) AI/Robotics +.9% 2) Cyber Security +.9% 3) Software +.5%

Stocks Rising on Unusual Volume:

• OSCR, SAVA, TNGX, ESTA, SAGE, GMED, ASLE, INFY, IRBT, VNT, ZIM, CHK, ITGR, ESTC, MMYT, SLNO, HPK, ZGN and AB
  

Stocks With Unusual Call Option Activity:

• 1) FTI 2) OUST 3) TME 4) EWJ 5) BITI

Stocks With Most Positive News Mentions:

• 1) SDHC 2) TTGT 3) SDHC 4) JYNT 5) MRVL
  

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)/.53
• (BLK)/8.83
• (BK)/.85
• (C)/.07
• (DAL)/1.16
• (JPM)/3.35
• (UNH)/5.98
• (WFC)/.86
  

After the Close: 

• None of note
  

Economic Releases

8:30 am EST

• PPI Final Demand MoM for Dec. is estimated to rise +.1% versus unch. in Nov.
• PPI Ex Food and Energy MoM for Dec. is estimated to rise +.2% versus unch. in Nov.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Kashkari speaking, the WASDE report, US Baker Hughes rig count and the CFTC speculative positioning reports 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 +9.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.0 +.6
  
• 10 Sectors Declining, 1 Sector Rising
• 24.2% of Issues Advancing, 75.0% Declining 
• TRIN/Arms 1.14 -16.7% 
• Non-Block Money Flow -$188.2M
  
• 9 New 52-Week Highs, 23 New Lows
• 60.7%(-3.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 56.0 -5.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 59.2 +3.3%
• Bloomberg Cyclicals/Defensives Pair Index 137.1 -.04%
  
• Russell 1000: Growth/Value 18,525.6 +.16%
• CNN Fear & Greed Index 71.0 (Greed) -4.0
• 1-Day Vix 10.8 -21.9%
  
• Vix 13.0 +2.2%
  
• Total Put/Call .95 -25.8%

Thursday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 99.75 -2.0 basis points.

• China Sovereign CDS 63.5 -1.0 basis point.
  
• China Iron Ore Spot 132.9 USD/Metric Tonne +.02%.

• Bloomberg Emerging Markets Currency Index 41.26 +.09%.
• Bloomberg Global Risk-On/Risk Off Index 59.7 +4.2%.
  
• Bloomberg US Financial Conditions Index .84 n/a.
  
• Volatility Index(VIX) futures 14.21 -.61%.
• Euro Stoxx 50 futures +.40%.

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.25%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.