Stocks Finish Substantially Higher on Earnings Outlook Optimism, US Economic Data, Technical Buying, Tech/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.6 -5.0%
• DJIA Intraday % Swing .50 +20.3%
  
• Bloomberg Global Risk On/Risk Off Index 72.8 +2.4%

• Euro/Yen Carry Return Index 176.2 +.2%

• Emerging Markets Currency Volatility(VXY) 6.4 -.9%

• CBOE S&P 500 Implied Correlation Index 17.3 -3.9% 

• ISE Sentiment Index 150.0 +13.0
  

• Total Put/Call .94 -13.8%

• NYSE Arms 1.36 +74.7% 
• NYSE Non-Block Money Flow +$170.M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 50.8 -3.6%
  

• US Energy High-Yield OAS 292.50 -2.9%
• Bloomberg TRACE # Distressed Bonds Traded 261 -10
  

• European Financial Sector CDS Index 64.4 -2.8% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 207.5 -2.6%
  

• Italian/German 10Y Yld Spread 148.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 96.2 -1.9%
  

• Emerging Market CDS Index 168.9 -4.0%
• Israel Sovereign CDS 119.9 -3.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.79 +.28%

• 2-Year SOFR Swap Spread -14.0 basis points -1.25 basis points
  

• Treasury Repo 3M T-Bill Spread 10.0 basis points +3.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -.25 basis point
  
• MBS  5/10 Treasury Spread 158.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 836.0 +2.0 basis points
  
• Avg. Auto ABS OAS 65.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.3 -.1%
• 3-Month T-Bill Yield 5.40% +4.0 basis points
  

• China Iron Ore Spot 120.8 USD/Metric Tonne +.9%
• Dutch TTF Nat Gas(European benchmark) 23.2 euros/megawatt-hour -3.3%

• Citi US Economic Surprise Index 43.8 +3.5 points

• Citi Eurozone Economic Surprise Index 41.4 +7.1 points

• Citi Emerging Markets Economic Surprise Index -4.2 -1.7 points
• S&P 500 Current Quarter EPS Growth Rate YoY(438 of 500 reporting) +6.7% +1.9 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 246.39 +.11:  Growth Rate +11.6% +.4 percentage point, P/E 20.6 +.4
  
• S&P 500 Current Year Estimated Profit Margin 12.81% +163.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +57.2% +13.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 309.0 +.46: Growth Rate +44.9% +.3 percentage point, P/E 32.3 +1.4
  
• Bloomberg US Financial Conditions Index 1.07 +7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .81 +43.0 basis points
  
• US Yield Curve -39.0 basis points (2s/10s) -4.5 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.9% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.7% -3.5 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.11% unch.
  
• 10-Year TIPS Spread 2.31 -4.0 basis points
  
• Highest target rate probability for May 1st FOMC meeting: 73.4%(+5.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 52.0%(-.9 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +327 open in Japan 
• China A50 Futures: Indicating -6 open in China

• DAX Futures: Indicating +52 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value +.2%
  

Sector Underperformers:

• 1) Alt Energy -2.9% 2) Gold & Silver -1.8% 3) Telecom -1.5%

Stocks Falling on Unusual Volume: 

• PLNT, APA, LNG, VITL, BNL, TFX, KTOS, EXAS, AHH, TNK, NEM, PGNY, BLZE, ETSY, DRVN, TBI, PRG, FIVN, FLNC, WEAV, FVRR, LUNG, GSHD and RIVN
  

Stocks With Unusual Put Option Activity:

• 1) HUN 2) NVAX 3) FLNC 4) XLI 5) ETSY
  

Stocks With Most Negative News Mentions:

• 1) RIVN 2) LCID 3) FLNC 4) NOVA 5) GSHD
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +3.1%
  

Sector Outperformers:

• 1) Disk Drives +7.1% 2) Semis +5.3% 3) Computer Hardware +5.0%

Stocks Rising on Unusual Volume:

• MATV, SMCI, GCT, AMLX, RXRX, RCUS, OUT, ACVA, FCN, RELY, RILY, MRNA, NVDA, TNDM, IBP, CLS, WES, AMD, LNTH, NICE, CNNE, ICLR, ACMR, ERF, PWR, WING, DELL, TS, QTWO, UCTT, VAC, ARM, CAMT, YPF, FROG, BMA, CRSP, ENOV, SNPS, RCL, NTR, HUN, W, CRTO, FTI, COHR, ZS, NMRK, TCOM, IRM, GNK, VRT, DOCN, NGVT, MOS, FIHL, ANET, BLCO, CAVA, PANW, LAMR, TNL, CYBR, VAL, CART, IQV, BIDU, WK, CUK, LZ, CAKE, BYON, NOW and BALY
  

Stocks With Unusual Call Option Activity:

• 1) ALIT 2) XLI 3) AMLX 4) NICE 5) FLR

Stocks With Most Positive News Mentions:

• 1) NVDA 2) SMCI 3) OUT 4) AMD 5) SNPS
  

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:

• (BLMN)/.69
• (LAMR)/7.44
• (SSP)/.15
• (WBD)/-.10
  

After the Close: 

• None of note
  

Economic Releases

9:00 am EST

• Bloomberg US Economic Survey for Feb.
  

Upcoming Splits 

• (WMT) 3-for-1
  

Other Potential Market Movers

• The BMO Metals/Mining/Critical Minerals Conference and the (CSCO) investor meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +4.7% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.8 +.8
  
• 1 Sector Declining, 10 Sectors Rising
• 62.9% of Issues Advancing, 35.2% Declining 
• TRIN/Arms 1.19 +50.6%
  
• Non-Block Money Flow +$189.3M
  
• 181 New 52-Week Highs, 33 New Lows
• 59.2% (+.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.0 +5.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 73.3 +3.1%
• Bloomberg Cyclicals/Defensives Pair Index 139.5 +.7%
  
• Russell 1000: Growth/Value 19,388.5 +2.0%
• CNN Fear & Greed Index 78.0 (Greed) +11.0
• 1-Day Vix 11.0 -38.6%
  
• Vix 14.3 -7.0%
  
• Total Put/Call .94 -13.8%

Thursday Watch

Night Trading 

• Asian equity indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 97.0 -2.5 basis points.

• China Sovereign CDS 64.0 -1.5 basis points.
  
• China Iron Ore Spot 119.8 USD/Metric Tonne +.6%.

• Bloomberg Emerging Markets Currency Index 40.3 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 72.3 +1.7%.
• Volatility Index(VIX) futures 14.8 -3.6%.
• Euro Stoxx 50 futures +.71%

• S&P 500 futures +.68%.

• NASDAQ 100 futures +1.41%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 75% net long heading into the day.