Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, China Stimulus Hopes, Earnings Outlook Optimism, Alt Energy/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.5 -1.5%
• DJIA Intraday % Swing .51 -53.0%
  
• Bloomberg Global Risk On/Risk Off Index 60.7 -.8%

• Euro/Yen Carry Return Index 171.6 -.4%

• Emerging Markets Currency Volatility(VXY) 7.1 -1.7%

• CBOE S&P 500 Implied Correlation Index 18.3 +4.2% 

• ISE Sentiment Index 149.0 unch.
  

• Total Put/Call .74 -22.1%

• NYSE Arms .79 -41.0% 
• NYSE Non-Block Money Flow +$91.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 55.19 +.02%
  

• US Energy High-Yield OAS 326.5 +.34%
• Bloomberg TRACE # Distressed Bonds Traded 333 +9
  

• European Financial Sector CDS Index 70.6 +1.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 219.3 +5.1%
  

• Italian/German 10Y Yld Spread 156.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 99.9 -.6%
  

• Emerging Market CDS Index 178.49 -1.6%
• Israel Sovereign CDS 124.1 -.63%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.49 unch.

• 2-Year SOFR Swap Spread -13.75 basis points -.25 basis point
  

• Treasury Repo 3M T-Bill Spread 6.0 basis points -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.25 basis point
  
• MBS  5/10 Treasury Spread 149.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 858.0 -6.0 basis points
  
• Avg. Auto ABS OAS 69.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.6 +.15%
• 3-Month T-Bill Yield 5.36% -2.0 basis points
  

• China Iron Ore Spot 125.5 USD/Metric Tonne +.4%
• Dutch TTF Nat Gas(European benchmark) 28.6 euros/megawatt-hour +.9%

• Citi US Economic Surprise Index 42.9 +.3 point

• Citi Eurozone Economic Surprise Index 22.5 +13.5 points

• Citi Emerging Markets Economic Surprise Index -1.7 +.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(256 of 500 reporting) +4.2% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 244.98 -.01:  Growth Rate +10.7% unch., P/E 20.2 unch.
  
• S&P 500 Current Year Estimated Profit Margin 11.40% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +44.2% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 302.29 +.48: Growth Rate +41.7% +.2 percentage point, P/E 31.3 -.4
  
• Bloomberg US Financial Conditions Index 1.03 +4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .70 -3.0 basis points
  
• US Yield Curve -32.0 basis points (2s/10s) -.25 basis point
  
• US Atlanta Fed 1Q GDPNow Forecast +4.2% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 59.6% +1.6 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.96% unch.
  
• 10-Year TIPS Spread 2.24 -2.0 basis points
  
• Highest target rate probability for May 1st FOMC meeting: 54.3%(+.3 percentage point) chance of 5.0%-5.25%. Highest target rate probability for June 12th meeting: 51.5%(+4.0 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -200 open in Japan 
• China A50 Futures: Indicating +17 open in China

• DAX Futures: Indicating +87 open in Germany

Portfolio:

• Higher:  On gains in my biotech/consumer discretionary/industrial/utility sector longs

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.4%
  

Sector Underperformers:

• 1) Semis -1.4% 2) Regional Banks -1.3% 3) Homebuilding -1.2%

Stocks Falling on Unusual Volume: 

• VRTX, DOCU, FROG, HESM, CHTR, LBRDK, MOR, AMKR, FDMT, UBS, CEIX, FMC, CCK, AKRO, MDGL, RMBS, FN and SYM
  

Stocks With Unusual Put Option Activity:

• 1) MOR 2) CARR 3) NYCB 4) OZK 5) CHGG
  

Stocks With Most Negative News Mentions:

• 1) FN 2) SYM 3) RMBS 4) NYCB 5) FMC
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.9%
  

Sector Outperformers:

• 1) Airlines +5.2% 2) Airlines +4.0% 3) Electric Vehicle +2.8%

Stocks Rising on Unusual Volume:

• IMNM, PLTR, COHR, EH, GEHC, BILI, ATHM, CHX, ARCB, STAA, SKY, LI, ZTO, RPRX, TM, BZ, VRNS, TAL, ATXS, DD, WTW, QGEN, CBT, BP, YY, LITE, PNC, UPS, XYL, MAC, SPG, KKR, BABA, ERII, SPOT, CMI, THR, GT and BEPC
  

Stocks With Unusual Call Option Activity:

• 1) XLI 2) PLTR 3) GEHC 4) DISH 5) NXPI

Stocks With Most Positive News Mentions:

• 1) PLTR 2) COHR 3) GEHC 4) ASII 5) ARCB
  

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:

• (BABA)/19.12
• (BERY)/1.31
• (BG)/2.81
• (CCJ)/.18
• (CG)/.78
• (CDW)/2.56
• (CVS)/1.98
• (EMR)/1.04
• (FOXA)/.13
• (HAIN)/.12
• (HLT)/1.57
• (PAG)/3.66
• (RBLX)/-.55
• (SMG)/-1.47
• (XPO).62
• (YUM)/1.40
  

After the Close: 

• (ALL)/3.94
• (ARM)/.25
• (COTY)/.20
• (CUZ)/.64
• (EFX)/1.74
• (GPRO)/.02
• (MAT)/.31
• (MCK)/7.04
• (NWSA)/.21
• (ORLY)/9.16
• (PYPL)/1.36 
• (RRR)/.45
• (DIS)/1.00
• (WYNN)/1.15
• (UBER)/.16
  

Economic Releases

8:30 am EST

• The Trade Deficit for Dec. is estimated at -$62.0B versus -$63.2B in Nov.

3:00 pm EST

• Consumer Credit for Dec. is estimated to fall to $15.9B versus $23.751B in Nov.

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Kugler speaking, Fed's Collins speaking, Fed's Barkin speaking, Fed's Bowman speaking, 10Y T-Note auction, Atlanta Fed GDPNow Q1 Update, weekly MBA Mortgage Applications report, IBD/TIPP Economic Optimism Index for Feb. and the Guggenheim Healthcare Biotech Conference 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 +25.8% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.6 -.5
  
• 3 Sectors Declining, 8 Sectors Rising
• 70.0% of Issues Advancing, 27.4% Declining 
• TRIN/Arms .88 -34.3%
  
• Non-Block Money Flow +$36.3M
  
• 64 New 52-Week Highs, 27 New Lows
• 59.0% (+3.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 62.0 +3.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 60.5 -1.5%
• Bloomberg Cyclicals/Defensives Pair Index 136.5 -.5%
  
• Russell 1000: Growth/Value 19,271.6 -.8%
• CNN Fear & Greed Index 73.0 (Greed) unch.
• 1-Day Vix 9.9 +1.8%
  
• Vix 13.8 +.7%
  
• Total Put/Call .72 -24.2%

Tuesday Watch

Evening Headlines

Bloomberg:   

• Wall Street Snubs China for India in a Historic Markets Shift.
  
• Asia Hedge Funds Win With Long Oil Wagers, Short China Consumer.
• China’s Penny-Pinching Companies Are Dealing a Blow to Growth.
• Missed Dues on China LGFVs’ Private Debt Cascade Into Bonds.
• Japan’s Wage Data Likely Solid Enough to Keep BOJ on Track.
• US Economy Is Remarkably Strong Compared to Europe, OECD Economist Says.
• Asia Shares Fall as Data Cut Quick Fed Pivot Hope: Markets Wrap. 
• Oil Steady as Middle East Risks Offset by Hawkish Fed Comments.
• NYCB’s Tense Talks With Watchdog Led to Moves That Rocked Market. 
• Trump, House GOP Leaders Reject Senate Border-Ukraine Deal.
• Commercial Real Estate’s Slow-Motion Crisis Explained.
• RTX Probed by SEC Over Disclosures in Huge Jet-Engine Recall.
• Reddit Revenue Rises 20% Ahead of IPO, But It Isn’t Profitable Yet. 
• The West’s Share of US Population Is Falling. 
• Early Wall Street Bank to Predict a US Recession Scraps Its Call.

Zero Hedge:

• 'Markets Are Now Anchoring On Potential Trump Victory' - Ex-Soros CIO Says "All Pullbacks Should Be Bought".
• "Society One Step Closer To Dystopia": Vision-Pro Early-Adopters Spotted In Wild. 
• New Jersey Illegal Migrant Gang Charging Other Migrants $6,000 To Illegally Migrate.
• Hong Kong Set To Pass Article 23, Further Tightening Beijing’s Control.
• Doctor Who Helped A Wounded Ashli Babbitt On Jan. 6 Sentenced To Probation.
• US Presidents' Approval Ratings In Their Third Year Since WWII.
• "Take Our Border Back" Convoy Ends With Rallies In 3 States.
• Massachusetts Cuts College Degree Requirements For 90% Of State Jobs.
• These Are The US States Losing (& Gaining) Population.
• Open Borders & Closed Courts: How The Supreme Court Laid The Seeds For The Immigration Crisis.
• Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment.
• US stocks were pressured and yields climbed after hot ISM Services and recent Fed rhetoric - Newsquawk Asia-Pac Market Open.
• US stocks were pressured and yields climbed after hot ISM Services and recent Fed rhetoric - Newsquawk Asia-Pac Market Open.
• Trump Says AI Might Be 'Most Dangerous Thing Out There'.
• Teflon tech defies rates.
• Border Crisis: Democrats Are Trying To Run A Protection Racket On The American Public
• 50 Lawmakers Demand AG Garland Explain Illegal CCP-Linked Marijuana Farms.
• Stocks and bonds fall on hot data and more hawkish Fed Speak - Newsquawk US Market Wrap.
• VDH: Is Biden Malicious, Incompetent, Or Conniving?
• Bonds, Bullion, Banks, & Bitcoin Battered As "Good News Is Bad News" Again After Powell.

Wall Street Journal:

• Iran-Backed Groups Continue to Target American Bases.
• Dartmouth Reinstates SAT Requirement in First for Ivies.
• The Elites Opened the Doors to Migrants—and Chaos. Bleeding-heart liberalism has taken a dangerous turn toward an ideology that rejects national borders.

CNBC.com:

• Mortgage rates jump back over 7% as stronger economic data rolls in.
• Oil market will face supply shortage by end of 2025: Occidental CEO.
• Fed’s Kashkari backs sentiment that policymakers can take their time cutting interest rates.

Reuters:

• China's tumbling prices push some exporters to the brink.

MarketWatch.com:

• Palantir’s stock surges nearly 20% as company rides AI wave to upbeat earnings, outlook.
• ‘A life and death scenario’: Small businesses say they’re paying more than 100% of profits to Uncle Sam after tax-law change.

Newsmax:

• Trump: Border Bill 'Can't Be Signed'.
• Trump: Iran Has Become 'a Real Force'.
• Trump: Haley Supported by Democrats.
• Trump: RNC's McDaniel 'Knows' It's Time to Step Down.
• Video Report: Biden Curses Netanyahu.

Fox News:

• Arizona county official’s blunt message to Congress on Senate's border security bill.
• Jen Psaki surprised when analyst admits he's in 'freakout stage' about Trump's Jan. 6 trial.

TheGatewayPundit.com:

• Schumer Threatens to Send US Troops to Fight Russia Unless Republicans Agree to His $100 Billion World Aid Bill (VIDEO).
• PBS Documentary Reveals J6 Committee Was All Publicity Stunt Meant to Manipulate Audience – An Assault on the American Conscience (VIDEO).
• Victor Reacts: You Call That A Border Bill? They Want to Send the Money to the Wrong Country! (VIDEO).
• SHOCK VIDEO: Aliens on Moped Drag Woman Along NYC Street and Rob Her – Cops Reveal Venezuelan Gang is Linked to Dozens of Similar Attacks – Two Thugs Identified and Arrested (VIDEO).
• MONUMENTAL RULING FOR ELECTION INTEGRITY: First Circuit Court of Appeals Rules Voter Rolls are Public Records and Election Officials Cannot Hide Them from the Public.
• Poll Shows Trump Now Leads Among Latinos as Biden’s Approval Drops to New Low.
• Here is the Full Roster of Senate Republicans Aiming to Block the Uniparty Bill Proposed by RINO Sen. Lankford.
• Brandon Gill, the America First Candidate for TX-26, Releases First Ad of His Race, Titled: “Every Single One” (Video).
• UPDATE: ‘San Judas Break’: Stunning 60 Minutes Report on Chinese Migrant Invasion of Southern California Through Tiny Gap in Border Wall Promoted on TikTok.
• El Salvador Reelects Nayib Bukele in a Landslide – Young President Reaps the Rewards for His ‘Iron Fist’ Takeover of Criminal Gangs.
• State Takes ANOTHER Stab at Fixing Anti-Christian Targeting.
• Another Satanic Display at Grammy Awards: Singer Performs Satanic Ritual with Demon Sucking Blood and Blood Leaking from Walls.
• Nikki Haley Goes on CNN – Bashes Trump, Announces Her Support for “Border Bill” That Gives 60 Billion to Ukraine and $20 Billion to Border (Video).

The Epoch Times:

• US ‘Would Be Naive’ to Assume CCP Won’t Attempt Election Interference: House China Committee Leader.
• Judge, Jury, Executioner: Beijing Trying to Change How We Think About Taiwan.
• CCP ‘Creating an Empire’ Exploiting International Financial Systems: Rep. Lucas.

X:

• @zerohedge - US Cattle Herd At 73-Year Lows As Retail Beef Prices At Record Highs.
• @Libsoftiktok -  Disney partnered with Kleenex to go all in on LGBTQ propaganda.
  @Kleenex designed special LGBTQ pride tissue packaging with @Disney themed designs. (video)
• @RobertKennedyJr - The legacy media is in shambles because we’ve caught onto their lies and propaganda. Tucker Carlson has every right to interview Putin. We need more transparency instead of less. It used to be understood journalists would interview world leaders, even those with whom we were at war.
• @WallstreetSilv - Wind power is a complete "green" scam. They cannot be built without massive amounts of fossil fuels. Financially they don't make any sense. None of the materials can be recycled at their end of their 12-20 year lifespan, they have to bury those blades. It is all a huge waste of energy and money. (video)
• @unlimited_Ls - Bill Maher calls out Joe Biden for lying about requiring additional paperwork from Congress to deal with the border issues "The president can fix this, he already has the existing laws…This is all so silly... I need a piece of paper from Congress to deal with the border…No, you already have that." (video)
• @KariLake - Pouring through this DISASTROUS Schumer-Sinema Border Bill. Maybe Kyrsten Sinema should run for Senate in Ukraine—her bill sends $60,000,000,000+ to Zelensky and $0 is allocated for a Border Wall. Once again they put America Last. Kyrsten, Please just stop lying to Arizonans. We’re perfectly capable of reading & understanding this disaster for ourselves. You sold us out. Again.
• @simonateba - BREAKING: Senator Mike Lee (@BasedMikeLee) EXPLODES after new Senate bill unveiled, writes, “Democrats want to defund the police and Immigration and Customs Enforcement (ICE) in the U.S. but send $300 million to Ukrainian law enforcement and the Ukrainian State Border Guard Service.”
• @cb_dodge - BREAKING: Biggest news websites in the world sees traffic slumps for second month in a row. While, traffic for 𝕏 is at an all time high. Traditional media is a direct competitor to 𝕏. One of the reasons why they are publishing fake articles targeting
  @elonmusk. (graph)
• @DrJBhattacharya - Rulers like Justin Trudeau and Joe Biden both embraced outright bigotry against the unvaccinated. It was dangerous rhetoric that led to violations of basic civil rights for a minority population. (video)
• @JunkScience - 'Net zero' is a science hoax, engineering impossibility and disastrous policy. Join the growing global backlash for sane, accountable, limited and non-globalist government.
• @BGatesIsaPsycho - Greece Farmers join the fight under a completely Geo-Engineered sky. Blocking out the Sun is also bad for farmers didn’t you know? (video)
• @Chicago1Ray - Fox News is backing Nikki Haley so they won't show how many people support Trump in South Carolina so you know what to do. (video)
• @seanmdav - This abomination of a bill legalizes the invasion of 2 million illegals every year, pays for their lawyers, and gives Ukraine another $60 billion. Your government hates you and wants to replace you, but until that happens, it’s going to steal every last dime from you it can.
• @liz_churchill10 - Canada has halted their Extermination Program for the Mentally-ill until 2027. Read that twice. 
• @LauraLoomer - Is the new Senate border bill trying to launder money to @JoeBiden? Why is there an extra $39 MILLION in “funds appropriated to the President operating expenses” that is listed in the middle of the new Senate Border Bill? WHY DOES JOE BIDEN GET $39 MILLION?! (document)
• @Breaking911 - INVASION: TikTok giving migrants step-by-step instructions on how to illegally enter the U.S. (video)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 1,000,725 Reports(+2,808 from prior report) Through December 29th, 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 -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 101.25 +1.0 basis point.

• China Sovereign CDS 65.5 +1.5 basis points.
  
• China Iron Ore Spot 125.3 USD/Metric Tonne -.7%.

• Bloomberg Emerging Markets Currency Index 40.5 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 60.4 -1.2%.
• Volatility Index(VIX) futures 15.1 +.4%.
• Euro Stoxx 50 futures +.23%

• S&P 500 futures unch..

• NASDAQ 100 futures +.08%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and consumer shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.