Stocks Rising into Final Hour on Earnings Outlook Optimism, Stable Long-Term Rates, Technical Buying, Tech/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Rising
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.9 -.9%
• DJIA Intraday % Swing .40 -20.9%
  
• Bloomberg Global Risk On/Risk Off Index 61.8 +1.5%

• Euro/Yen Carry Return Index 172.3 +.3%

• Emerging Markets Currency Volatility(VXY) 7.1 -1.0%

• CBOE S&P 500 Implied Correlation Index 17.5 -1.2% 

• ISE Sentiment Index 149.0 unch.
  

• Total Put/Call .88 +14.3%

• NYSE Arms 1.23 +40.0% 
• NYSE Non-Block Money Flow +$262.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 55.3 -.52%
  

• US Energy High-Yield OAS 318.57 -2.1%
• Bloomberg TRACE # Distressed Bonds Traded 338 +5
  

• European Financial Sector CDS Index 71.3 +.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 224.0 +2.2%
  

• Italian/German 10Y Yld Spread 157.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 99.4 -.6%
  

• Emerging Market CDS Index 178.35 -.08%
• Israel Sovereign CDS 125.6 +1.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.5+.02%

• 2-Year SOFR Swap Spread -14.0 basis points -.25 basis point
  

• Treasury Repo 3M T-Bill Spread 7.75 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -6.5 -1.25 basis points
  
• MBS  5/10 Treasury Spread 150.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 851.0 -7.0 basis points
  
• Avg. Auto ABS OAS 70.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.5 -.17%
• 3-Month T-Bill Yield 5.38% +2.0 basis points
  

• China Iron Ore Spot 126.7 USD/Metric Tonne +1.3%
• Dutch TTF Nat Gas(European benchmark) 28.2 euros/megawatt-hour -1.5%

• Citi US Economic Surprise Index 43.5 +.6 point

• Citi Eurozone Economic Surprise Index 20.6 -1.9 points

• Citi Emerging Markets Economic Surprise Index -2.2 -.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(285 of 500 reporting) +4.2% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 245.02 +.04:  Growth Rate +10.7% unch., P/E 20.4 +.2
  
• S&P 500 Current Year Estimated Profit Margin 11.34% -6.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +44.2% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 302.81 +.52: Growth Rate +42.0% +.3 percentage point, P/E 32.0 +.7
  
• Bloomberg US Financial Conditions Index 1.02 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index 1.10 +40.0 basis points
  
• US Yield Curve -32.0 basis points (2s/10s) unch.
  
• US Atlanta Fed 1Q GDPNow Forecast +3.4% -.8 percentage point
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.2% +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 unch.
  
• Highest target rate probability for May 1st FOMC meeting: 56.7%(+1.3 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 12th meeting: 52.4%(+1.2 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +205 open in Japan 
• China A50 Futures: Indicating -60 open in China

• DAX Futures: Indicating +121 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value +.1%
  

Sector Underperformers:

• 1) Gold & Silver -1.2% 2) Biotech -1.1% 3) Digital Health -1.0%

Stocks Falling on Unusual Volume: 

• VOYA, REXR, TTE, FRSH, AMRK, RITM, DB, FLNG, DAY, AMGN, BABA, HRB, AEIS, TGNA, EQNR, NYT, VREX, NXST, MDGL, INSP, ZLAB, BERY, MRCY, MRCY, FDMT, SBGI, VSTS, CRNC, VSAT, KREF, TGI, PERI and SNAP
  

Stocks With Unusual Put Option Activity:

• 1) HLF 2) FUBO 3) VLY 4) BXMT 5) SNAP
  

Stocks With Most Negative News Mentions:

• 1) FUBO 2) SNAP 3) SHCO 4) PERI 5) GTN
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.3%
  

Sector Outperformers:

• 1) Cyber Security +1.9% 2) Restaurants +1.9% 3) Software +1.8%

Stocks Rising on Unusual Volume:

• ENPH, XPO, SONO, CRTO, CRUS, GPRE, AZEK, NOVA, SEDG, SLAB, OI, GFF, EMR, IMNM, RGNX, RBLX, CRC, TREX, SEMR, CG, YUMC, GOGO, PLTR, CSL, COHR, WFRD, LQDA, PRU, TENB, F, CMRE, MOR, ZIMV, ZWS, CDW, FN, XYL, CFLT, SIMO, LLY, MANU, IEX and SPOT
  

Stocks With Unusual Call Option Activity:

• 1) HLF 2) DB 3) CMG 4) VFC 5) NYCB

Stocks With Most Positive News Mentions:

• 1) CRUS 2) EMR 3) SONO 4) ENPH 5) XPO
  

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:

• (MT)/-2.25
• (AZN)/.74
• (BAX)/.86
• (BWA)/.95
• (COP)/2.09
• (DUK)/1.53
• (FTS)/.53
• (HOG)/.03
• (HSY)/1.95
• (ICE)/1.29
• (ITT)/1.34
• (K)/.74
• (MAS)/.66
• (PM)/1.45
• (RL)/3.57
• (SNA)/4.66
• (SWI)/.21
• (SAVE)/-1.42
• (TROW)/1.62
• (TPR)/1.46
• (TPX)/.54
• (THC)/1.60
• (TDG)/6.41
• (UAA)/.11
• (ZBH)/2.15
  

After the Close: 

• (AFRM)/-.72
• (BILL)/.40
• (BYD)/1.47
• (NET)/.12
• (CPRI)/1.73
• (EXPE)/1.67
• (FE)/.60
• (ILMN)/.01
• (LEG)/.27
• (MHK)/1.86
• (PINS)/.51
• (TTWO)/.72
• (TEX)/1.39
• (BTU)/1.40
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week is estimated to fall to 220K versus 224K the prior week.
• Continuing Claims are estimated to fall to 1876K versus 1898K prior.
  

10:00 am EST

• Wholesale Trade Sales MoM for Dec. is estimated to rise +.3% versus unch. in Nov.

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Barkin speaking, 30Y T-Bond auction, Guggenheim Helathcare Biotech Conference, weekly MBA Mortgage Applications report, (FFIV) business update, (TSN) annual meeting and the (BZH) annual meeting 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 +37.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 7.4 -1.2
  
• 3 Sectors Declining, 8 Sectors Rising
• 45.2% of Issues Advancing, 52.1% Declining 
• TRIN/Arms 1.44 +63.6%
  
• Non-Block Money Flow +$215.1M
  
• 131 New 52-Week Highs, 25 New Lows
• 57.5% (-2.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 6.0 +3.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.5 +1.0%
• Bloomberg Cyclicals/Defensives Pair Index 137.8 +.8%
  
• Russell 1000: Growth/Value 19,522.3 +.9%
• CNN Fear & Greed Index 74.0 (Greed) +1.0
• 1-Day Vix 9.8 -.9%
  
• Vix 13.1 +.1%
  
• Total Put/Call .89 +15.6%

Wednesday Watch

X:

• @JesseKellyDC - The security guard we hired to protect our home has been letting people inside the home to loot our stuff. He just came to us and demanded a raise and if we give him one, he promises to let fewer people in to loot our stuff. That’s the border bill. 
  
• @amuse - PUBLIC INFO: Taylor Swift’s attorneys have threatened legal action against a college student who tracks the private jet trips of the pop star and calculates her CO2 impact on global warming.
• @wendyp4545 - Alert: They snuck into the bill $10 Billion for the Palestinians. and $400 million to NGO's.
  
• @EvaVlaar - This is good news because it shows that protesting WORKS and putting pressure on our overlords WORKS. However, just dropping the requirements for 2040 is not enough. The entire agenda has to go. The Green Deal and the NetZero scam has to go. We’ve won a battle, not the war.
• EndWokeness - Julius Malema has repeatedly called for the genocide of the 4 million Whites living in South Africa. Malema could very possibly be elected as Prime Minister in a few months. Zero international outrage. (video) 8+ million illegals invaded since 2021 and this is the best border "deal" the Uniparty has to offer: This might be the most insane part. This bill grants the far-left DC District Court exclusive authority over future immigration disputes.
• @hodgetwins - This is how they steal elections.
• @JesseBWatters - Primetime read the border bill so you don’t have to and we found that it wouldn’t stop a single migrant from breaking into our country. So what’s the $20 billion for? Processing illegals, handouts and loopholes. (video)
• @WallStreetSilv - Senator James Lankford ... threw away his career in the Senate for nothing. Everyone on X considers him a traitorous RINO. In reality, so is Mitch McConnell. But he is trying to let Lankford take the hit entirely for this one.
• @BGatesIsaPsycho - Ireland rising - The Irish have finally had enough - about time. (video) Spanish Farmers Are Go! Now it’s Spain’s turn to join the fight against Climate Communism & their corrupt Globalist Sell Out Government. Insane Net Zero & Co2 related legislation & tax will bankrupt them all.
• @Libsoftiktok - They’re embedding this ideology at every level in every institution and every Government agency. They will use the government and lawfare to go after your kids and force you to fall in line. This is a Mexican citizen who illegally entered our country in 2004 and was convicted of r*ping a child. He was deported in 2006. He was just taken into ICE custody in MA after re-entering our country illegally. Biden’s open border policies are allowing child r*pists to freely roam our country.
• @JunkScience - How "green" are solar panels?
• @wideawake_media - Club of Rome member, Dennis Meadows, hopes the "necessary" depopulation of the planet, down to one billion—an 87.5% reduction from today’s population—can "occur in a civil way". "The planet can support something like a billion people, maybe two billion, depending on how much liberty and how much material consumption you want to have." (video) All over the world, people are coming to the realisation that they can live without politicians, bureaucrats and unelected globalists, but they absolutely cannot live without farmers. If the farmers perish, we all perish. (video) A compilation of prominent political figures—including "King" Charles, Tony Blair, Hillary Clinton, Bill Clinton, Justin Trudeau, Boris Johnson, Barack Obama, Joe Biden and others—using the WEF's 'Build Back Better' slogan, in reference to Klaus Schwab's 'Great Reset' agenda. (video) "The vaccines aren't appropriate for use in humans." Florida's surgeon general, Dr. Joseph Ladapo, calls for an immediate halt to mRNA-based Covid "vaccines", citing cancer and other health risks. (video) Now they're coming for your coffee. Swiss banker and World Economic Forum "agenda contributor", Hubert Keller: "The coffee that we all drink emits between 15 and 20 tonnes of CO2 per tonne of coffee... Every time we drink coffee, we are basically putting CO2 into the atmosphere."
• @calleymeans -  The @TuckerCarlson convo has made it to the presidential trail. 33% of young adults are prediabetic 50% of teens are overweight. 40% of teens have mental health disorder. Answers aren’t complicated. Here are 5 policies that can be enacted tomorrow:
• @aTeXan575 - Take a listen please... (video)
• @LauraLoomer - Wow. Did you know @LeaderMcConnell’s daughter @PorterMcConnell co authored an anti-Trump book? 
• @VigilantFox - Bret Weinstein issues a chilling border crisis warning. He says that offering citizenship to illegals who join the military creates a “major hazard.” Why? “Because the perverse incentives for a migrant and the lack of allegiance to fundamental American values means that that would be just the kind of force that could be used to impose tyranny on other Americans because they would have no history with us.” (video)
• @julie_kelly2 - As if you need more evidence that the pipe bomb incident was an op and that the J6 committee's job was to cover it up--here you go. Stunning obfuscation here by committee chairman: (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 +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.5 -2.75 basis points.

• China Sovereign CDS 62.5 -3.0 basis points.
  
• China Iron Ore Spot 125.6 USD/Metric Tonne +.5%.

• Bloomberg Emerging Markets Currency Index 40.56 -.10%.
• Bloomberg Global Risk-On/Risk Off Index 60.97 +.16%.
• Volatility Index(VIX) futures 14.6 -.3%.
• Euro Stoxx 50 futures +.15%

• S&P 500 futures +.07%.

• NASDAQ 100 futures +.10%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial 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.