Stocks Rising into Afternoon on Earnings Outlook Optimism, US Economic Data, Short-Covering, Tech/Consumer Discretionary 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) 12.7 -.6%
• DJIA Intraday % Swing .43 -21.4%
  
• Bloomberg Global Risk On/Risk Off Index 61.9 +1.2%

• Euro/Yen Carry Return Index 174.0 +.13%

• Emerging Markets Currency Volatility(VXY) 6.9 -1.9%

• CBOE S&P 500 Implied Correlation Index 16.9 -2.0% 

• ISE Sentiment Index 164.0 +8.0
  

• Total Put/Call .73 -13.1%

• NYSE Arms 1.56 +47.2% 
• NYSE Non-Block Money Flow +$64.5M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 54.2 -2.0%
  

• US Energy High-Yield OAS 308.5 -1.8%
• Bloomberg TRACE # Distressed Bonds Traded 332 -8
  

• European Financial Sector CDS Index 69.6 -2.0% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 219.9 -2.6%
  

• Italian/German 10Y Yld Spread 158.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 100.3 +.43%
  

• Emerging Market CDS Index 178.57 -.61%
• Israel Sovereign CDS 122.4 -.26%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.54 +.18%

• 2-Year SOFR Swap Spread -13.75 basis points unch.
  

• Treasury Repo 3M T-Bill Spread 8.0 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -6.25 -.75 basis point
  
• MBS  5/10 Treasury Spread 152.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 842.0 -4.0 basis points
  
• Avg. Auto ABS OAS 68.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.5 -.2%
• 3-Month T-Bill Yield 5.38% unch.
  

• China Iron Ore Spot 127.8 USD/Metric Tonne +.9%
• Dutch TTF Nat Gas(European benchmark) 27.1 euros/megawatt-hour -1.3%

• Citi US Economic Surprise Index 44.1 +.1 point

• Citi Eurozone Economic Surprise Index 20.9 +.2 point

• Citi Emerging Markets Economic Surprise Index -.5 +3.6 points
• S&P 500 Current Quarter EPS Growth Rate YoY(334 of 500 reporting) +5.1% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 245.15 +.01:  Growth Rate +10.7% unch., P/E 20.4 unch.
  
• S&P 500 Current Year Estimated Profit Margin 11.28% -2.0 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 303.38 +.09: Growth Rate +42.2% unch., P/E 32.5 +.3
  
• Bloomberg US Financial Conditions Index 1.08 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .81 -42.0 basis points
  
• US Yield Curve -30.0 basis points (2s/10s) -.5 basis point
  
• US Atlanta Fed 1Q GDPNow Forecast +3.4% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 59.0% -1.5 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.94% -2.0 basis points
  
• 10-Year TIPS Spread 2.26 +1.0 basis point
  
• Highest target rate probability for May 1st FOMC meeting: 53.4%(+3.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 12th meeting: 44.4%(-2.2 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +263 open in Japan 
• China A50 Futures: Indicating -171 open in China

• DAX Futures: Indicating +106 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value -.1%
  

Sector Underperformers:

• 1) Shipping -1.5% 2) Gold & Silver -1.2% 3) Foods -1.2%

Stocks Falling on Unusual Volume: 

• RXO, PEAK, GEO, DXCM, PCTY, DT, FLO, SXT, MRNA, TEX, MGA, TTWO, OC, LEG, RAMP, EMBC, PINS, AFRM, BILL, EXPE and AMCX
  

Stocks With Unusual Put Option Activity:

• 1) EXPE 2) PINS 3) DXCM 4) TTWO 5) PSEC
  

Stocks With Most Negative News Mentions:

• 1) SYBX 2) EXPE 3) AMCX 4) AFRM 5) PINS
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.4%
  

Sector Outperformers:

• 1) Cyber Security +2.2% 2) Disk Drives +1.6% 3) AI/Robotics +1.5%

Stocks Rising on Unusual Volume:

• DOOR, CLSK, NET, IGMS, LITE, RIOT, MSTR, MRCY, SYM, VKTX, MARA, MWA, OWL, RGNX, WOR, PATH, AI, ONTO, ARVN, EVVX, POWI, MDGL, GPRE, CYBR, PI, MDB, COIN, AMAT, FVRR, SMCI, OSW, WEAV, CRNC, ATR, COOP, DDOG, EVER, KVYO, FOXA, FSLY, MNDY, QNST, AMPL, BERY, FE and MMYT
  

Stocks With Unusual Call Option Activity:

• 1) EXPE 2) AMLX 3) FROG 4) NET 5) DXCM

Stocks With Most Positive News Mentions:

• 1) INBS 2) SUNW 3) TOP 4) NET 5) CLSK
  

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:

• (MNDY)/.32
• (TRMB)/.60
  

After the Close: 

• (ANET)/1.70
• (CAR)/4.15
• (BLKB)/1.05
• (CDNS)/1.33
• (GT)/.36
• (LSCC)/.45
• (PFG)/1.69
• (TDC)/.52
• (VNO)/.61
  

Economic Releases

2:00 pm EST

• The Monthly Budget Statement for Jan. is estimated at -$40.0B versus -$129.4B in Dec.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Kashkari speaking, NY Fed 1Y Consumer Inflation Expectations Index, Wolfe Research Semi Conference, BTIG MedTech/Digital Health/Life Science/Diagnostic Tools Conference, TD Cowen Aerospace Defense Conference and the Oppenheimer Healthcare Life Sciences Conference could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +7.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.8 +1.7
  
• 7 Sectors Declining, 4 Sectors Rising
• 46.1% of Issues Advancing, 51.4% Declining 
• TRIN/Arms 1.73 +63.2%
  
• Non-Block Money Flow -$16.4M
  
• 125 New 52-Week Highs, 14 New Lows
• 58.9% (+.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 64.0 unch.
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.4 +.6%
• Bloomberg Cyclicals/Defensives Pair Index 139.4 +.1%
  
• Russell 1000: Growth/Value 19,773.8 +1.2%
• CNN Fear & Greed Index 78.0 (Extreme Greed) +2.0
• 1-Day Vix 8.4 -15.7%
  
• Vix 12.8 +.4%
  
• Total Put/Call .73 -13.1%

Friday Watch

Evening Headlines

Bloomberg:  

• The Global Tremors From China’s Real Estate Crisis Are Only Just Starting.
• Xi Can’t Use 2015 Playbook to Calm China Markets, Investors Say.
• Putin Takes Hard Line on Ukraine in Tucker Carlson Interview.
• Asia Equities Mixed as Markets Shut for Holidays: Markets Wrap.
• Biden Is Looking Beyond Tariffs to Keep Chinese ‘Smart Cars’ Out of the US.
• Hedge Funds to Share More on Their Strategies Under SEC Rule.

Zero Hedge:

• Tucker Carlson: The Putin Interview.
• 'Too Old And Feeble': No Charges For Biden Despite 'Willful' Mishandling Of Docs, National Security Risk.
• Pentagon Secretly Institutionalized DEI In Its K-12 Public Schools.
• MUFG Bank Warns The Global Refining Crisis Is "More Than Just A Temporary Phenomenon".
• Democrats Fail America's Youth As Dozens Of Schools In Illinois & Maryland Have Zero Kids Proficient In Math.
• US Asset Or US Adversary? Why Qatar Looks Worryingly Like Both.
• Iraq Closer To Expelling US Troops After Drone Strike In Busy Neighborhood.
• Judge Rules Former Trump Advisor Peter Navarro Will Remain In Prison While He Appeals Contempt Conviction.
• Biden To Hold Campaign Fundraiser In NYC With Barack Obama And Bill Clinton.
• Diesel Prices Primed To Rise Sharply In 2024.
• Hawaii Ignores US Supreme Court, Strikes Down Right To Carry Firearms In Public.
• US stocks eked mild gains and S&P 500 touched 5k for the first time - Newsquawk Asia-Pac Market Open.
• As Global Oil Inventories Are Rapidly, Unexpectedly Sinking, JPM Sees $10 Crude Jump By May.
• Sleepy SPX, soaring MEMEs, and skewed "signals".
• Money-Market Fund Assets Hit New Record High As Fed's Bank-Bailout Facility Holds At $165BN.
• Bonds sold on jobless claims and oil prices, SPX nudges 5k - Newsquawk US Market Wrap. 
• Massive Short-Squeeze Sends Small Caps Soaring; Big-Tech Skids, Bitcoin & Black Gold Bid.

Wall Street Journal:

• Investors Are Almost Always Wrong About the Fed.
• How the Rockefellers and Billionaire Donors Pressured Biden on LNG Exports.
• Putin Says He Is Open to Exchange of WSJ’s Evan Gershkovich for Russian Prisoner.
• U.S. Airstrike Increases Calls in Iraq to Expel Coalition Forces.

CNBC.com:

• Arm’s post-earnings pop leaves stock trading at over 100% premium to Nvidia.
• Putin, in rare U.S. interview, says Russia has no interest in attacking Poland or Latvia.
• J&J, Merck and Bristol Myers CEOs defend drug prices in Senate hearing, as Biden tries to cut prices.
• Cocoa prices surge to all-time highs as bad weather hurts West Africa crop yield.
• Expedia CEO Peter Kern resigns, Ariane Gorin to take the top job.

MarketWatch.com:

• Affirm’s stock falls after earnings, but analysts say not to sweat the outlook.
• Cloudflare’s stock catapults higher as earnings beat captures ‘robust momentum’.
• Pinterest’s stock takes a hit after revenue miss, middling guidance.
• Bill Holdings’ stock rallies, then falls after hours. Investors may have been looking for more profits after layoffs.
• Expedia spooks investors with CEO change.
• As tech layoffs mount, communities on LinkedIn are trying to find jobs for affected workers.
• Arm’s stock surge burns short sellers, to the tune of $445 million in paper losses.

TheGatewayPundit.com:

• WATCH NOW: Tucker Carlson’s Exclusive Interview with Vladimir Putin — Ukraine War, NATO, Bill Clinton, Elon Musk, Nord Stream Pipeline, and MORE.
• NY Supreme Court Slams Anti-Trump DA for Enforcing Harsh Vaccine Card Punishment on Residents.
• Watch: Star QB Aaron Rodgers Tells Joe Rogan What Big Pharma Companies Are Really After.
• The Great Clarence Thomas Blows Up Colorado Lawyer’s Argument for Kicking President Trump Off the State’s Ballot (AUDIO).
• Bill Melugin: Illegals from 73 Different Countries Invade San Diego in One Week Span.
• Special Counsel Hur Finds Joe Biden “Willfully Retained” TOP SECRET Military and National Security Information – DOJ Defends Lack of Criminal Charges Against Biden, a “Well-Meaning, Elderly Man with a Poor Memory”.
• Biden Effect: Credit Card Debts Hit Record High of $1.13 Trillion, Delinquencies Surge 50%.
• JUST-IN: America First Legal Files Landmark Lawsuit Against Maricopa County, Arizona Officials for Violating State Election Laws – FILING INCLUDED.
• WAYNE ROOT: “Will Taylor Swift Be the Next Bud Light?”.
• BREAKING: Obama Judge Denies Dr. Peter Navarro’s Request to Stay Out of Prison Pending Appeal.
• JUST IN: Senate Advances $95B Foreign Aid Bill for Ukraine, Israel, Gaza, and Taiwan, Omitting Border Security Provisions — Here are the 17 GOP Senators Who Voted with Democrats.
• BREAKING: Former Brazilian President Bolsonaro’s Home Raided and Passport Seized.
• Capitol Police Deploy Barricades and Busses at Supreme Court Ahead of Trump Ballot Case Review — GOP Lawmakers Reportedly Missing in Action While Democrats Show Strong Presence.
• Illegal Alien Released into the US Last Year Has Been Charged with Killing a Mother and Toddler in Pennsylvania.
• New Report Reveals Trump Would Have Won in 26 out of 29 Mail-in Ballot Fraud Scenarios During 2020 Election.
• MUST READ… J6 Law Student James Grant Who Was Sucker Punched By Cops, Beats Four Of Eight Felony Counts — Still Faces 20 Year Prison Sentence for Misdemeanor Offenses.
• ILLUSION OF CHOICE: Second Round of Voting in Finland’s Presidential Elections Pits Two Eurocentric Globalists Who Love Ukraine.
• Former Staffer Who Leaked Democrat Rep. Sheila Jackson Lee’s Controversial Audio Dies of a Drug Overdose.

X:

• @TPostMillennial - NBC News unwittingly reveals the plot to frame @libsoftiktok: (video)
• @WallStreetSilv -  $60 billion for Ukraine and $14 billion for Israel. But who remembers Maui? Only received $15 million & still need help... (video) Illegal Migrants Talk About 2024 Election: They believe they entered legally because they made a claim for asylum (fake claim) so they think they can vote. (video)
• @niicksortor - HARROWING MAUI 911 CALLS OF PEOPLE BEING FORCED BACK INTO THE FIRE. (video)
• @BGatesIsaPsycho - Chile - Fires Recent devastating fires have ravaged the country of Chile. Barely documented by MSM - more strange reports from locals posting eye witness visits following destruction. What do you see? (video)
• @WesternLensman - Democrat Election Playbook Explained: A Nine-Step Plan to Blame Donald Trump for the Border Crisis. (video)
• @KobeissiLetter - The U.S. Now Has: 1. Record $17.5 trillion in household debt 2. Record $12.3 trillion in mortgages 3. Record $1.6 trillion in auto loans 4. Near record $1.6 trillion in student loans 5. Record $1.1 trillion in credit card debt Total mortgage debt is more than double the 2006 peak and total credit card debt is officially up 50% since 2020. Meanwhile, delinquency rates on credit cards and auto loans just hit their highest since the 2008 financial crisis. Consumers are "fighting" inflation with debt.
• @gatewaypundit - Rand Paul Blasts Mitch McConnell: “This Has Been a Ruse – He’s Working with Biden and Schumer to Funnel Your Money to Ukraine- He’s Using Minority of Big Government Republicans to Work with Democrats” (VIDEO) via
  @gatewaypundit. (video)
• @charliekirk11 - A four minute MASTERCLASS on everything wrong with our elections by Mollie Hemingway. A must watch: (video)
• @VigilantFox - Joe Rogan Thrashes the Media for Ignoring Excess Deaths “If the media were legitimate, they would be talking about one of the biggest crises that’s happening in this country right now, which is a massive increase in all-cause mortality.” The data is alarming: (video) Ivermectin is often recognized – 2nd to penicillin – for having the greatest impact on human health. Its discovery even won the Nobel Prize. But the propagandists told you it was a “dangerous horse dewormer.” Now, why would they do such a thing? (video)
  
• @charliekirk11 - SCOOP: I just received word that Schumer has a CODEL (Congressional Delegation) to Kiev planned for two weeks from now to celebrate his and McConnell’s Ukraine funding win. These trips take weeks of advanced planning to pull off. If this is all true, then it’s almost certain Schumer knew that even if the border deal failed, McConnell would always help him give Biden his war money without getting anything in return.
• @BigFish3000 - 40,000 sworn affidavits and documents were delivered of suspected illegal election activity to R Governor Brian Kemp’s office. He later claimed the election was secure and fair and he was not aware of any instances. (video)
• @drawandstirke - Think, ponder and reflect on these plot points: 1. Russian hackers didn't take the DNC emails 2. Crowdstrike was brought in to provide a COVER STORY for how the DNC emails were actually taken 3. The person who took the DNC emails and gave them to Julian Assange was a whistleblower 4. This person later ended up dead under strange circumstances...
• @wideawake_media - "I think the dam is finally cracking." Award-winning journalist, Alex Newman, explains why the "human-induced climate change" narrative is finally crumbling. "Three new peer-reviewed papers, published in major prestigious scientific journals... completely undermine the alleged scientific consensus on man-made global warming." (video)
• @MJTruthUltra - Stephen A. Smith: How the Hell are Illegals Getting $53 Million, but Have Nothing for Folks who were Born and Raised Here? — “That’s why Trump is on the Verge of Being Re-Elected”. “How the hell do you print money for foreign countries, but you don’t print money to help eradicate folks that are starving here in the streets in America?” • Milk don’t need to cost $7 • Bread don’t need to cost $5 • Don’t get me started on sugar... (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 100.25 +.75 basis point.

• China Sovereign CDS 64.0 +1.0 basis point.
  
• China Iron Ore Spot 127.3 USD/Metric Tonne -.9%.

• Bloomberg Emerging Markets Currency Index 40.4 -.09%.
• Bloomberg Global Risk-On/Risk Off Index 61.6 +.9%.
• Volatility Index(VIX) futures 14.6 +.1%.
• Euro Stoxx 50 futures -.11%

• S&P 500 futures -.07%.

• NASDAQ 100 futures -.05%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by consumer and financial 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.