Stocks Higher into Afternoon on Lower Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Consumer Discretionary/Construction Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.0 -4.0%
• DJIA Intraday % Swing .40 -21.0%
  
• Bloomberg Global Risk On/Risk Off Index 72.3 -.8%

• Euro/Yen Carry Return Index 176.1 -.04%

• Emerging Markets Currency Volatility(VXY) 6.4 unch.

• CBOE S&P 500 Implied Correlation Index 16.8 -2.4% 

• ISE Sentiment Index 152.0 +26.0
  

• Total Put/Call .90 -3.2%

• NYSE Arms 1.39 +76.9% 
• NYSE Non-Block Money Flow +$126.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 51.0 -.64%
  

• US Energy High-Yield OAS 295.6 +1.2%
• Bloomberg TRACE # Distressed Bonds Traded 254 -7
  

• European Financial Sector CDS Index 63.3 -1.8% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 206.6 -.42%
  

• Italian/German 10Y Yld Spread 144.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 94.6 -1.6%
  

• Emerging Market CDS Index 166.5 -1.4%
• Israel Sovereign CDS 119.4 -.49%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.8 +.04%

• 2-Year SOFR Swap Spread -13.5 basis points +.5 basis point
  

• Treasury Repo 3M T-Bill Spread 9.5 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 unch.
  
• MBS  5/10 Treasury Spread 154.0 -4.0 basis points
  
• 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 40.1 -.5%
• 3-Month T-Bill Yield 5.40% unch.
  

• China Iron Ore Spot 119.4 USD/Metric Tonne -.5%
• Dutch TTF Nat Gas(European benchmark) 22.9 euros/megawatt-hour -1.1%

• Citi US Economic Surprise Index 43.8 unch.

• Citi Eurozone Economic Surprise Index 42.0 +.6 point

• Citi Emerging Markets Economic Surprise Index -4.3 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(449 of 500 reporting) +6.8% +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 247.08 +.69:  Growth Rate +11.9% +.3 percentage point, P/E 20.6 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.83% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +57.2% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 313.15 +4.15: Growth Rate +46.8% +1.9 percentage points, P/E 32.0 -.3
  
• Bloomberg US Financial Conditions Index 1.14 +7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .91 +10.0 basis points
  
• US Yield Curve -43.0 basis points (2s/10s) -4.0 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.9% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 50.6% -2.1 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.11% unch.
  
• 10-Year TIPS Spread 2.30 -1.0 basis point
  
• Highest target rate probability for May 1st FOMC meeting: 78.1%(+4.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 55.5%(+3.5 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +446 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating +42 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +.2%
  

Sector Underperformers:

• 1) Disk Drives -1.4% 2) Oil Service -.9% 3) Alt Energy -.5%

Stocks Falling on Unusual Volume: 

• ALTR, KTOS, PODD, TDOC, ZIP, IRTC, LUNG, EGO, OLED, RXRX, PEN, COLD, RIVN, BKNG, MELI, NWN, FMX, SMCI, GH, VICR, AAOI and FOXF
  

Stocks With Unusual Put Option Activity:

• 1) FYBR 2) FTI 3) AAOI 4) CVNA 5) PTEN
  

Stocks With Most Negative News Mentions:

• 1) VICR 2) AAOI 3) FOXF 4) NIO 5) IRTC
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%
  

Sector Outperformers:

• 1) Retail +2.1% 2) Gambling +2.1% 3) Homebuilding +1.4%

Stocks Rising on Unusual Volume:

• CVNA, SNBR, SQ, TNDM, AKRO, LZ, FIX, FIR, SYRE, H, EVH, RBA, AGIO, SFM, SEM, FTAI, PHAT, AU, NVEI, RKT, TCMD, ENV, WKC, ALRM, DRVN, LEGN, CAR, TCOM, LLYVA, COLL, ARWR, HSIC, PLAB, ZS, FVRR, BPMC, IBP, GDYN, EXEL, IRM, ARM, D, BLMN, FL AND CLDX
  

Stocks With Unusual Call Option Activity:

• 1) MAR 2) ARRY 3) FTAI 4) FIVN 5) GE

Stocks With Most Positive News Mentions:

• 1) SQ 2) CVNA 3) FIX 4) MRVI 5) NICE
  

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:

• (AMR)/9.07
• (DPZ)/4.38
• (ELAN)/.10
• (FDP)/.30
• (ITRI)/.75
• (PPC)/.43

After the Close: 

• (ADTN)/-.10
• (AES)/.67
• (EVBG)/.49
• (IRBT)/-2.11
• (STAA)/.17
• (TREX)/.19
• (U)/.23
• (WDAY)/1.47
• (ZM)/1.15
  

Economic Releases

10:00 am EST

• New Home Sales for Jan. is estimated to rise to 680K versus 664K in Dec.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for Feb. is estimated to rise to -18.6 versus -27.4 in Jan.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The 2/5Y T-Note auctions, UBS Financial Services Conference, BMO Metals/Mining Conference and the Wolfe Research Software Conference could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.8% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.6 +.8
  
• 2 Sectors Declining, 9 Sectors Rising
• 60.7% of Issues Advancing, 36.7% Declining 
• TRIN/Arms 1.64 +26.2%
  
• Non-Block Money Flow +$154.0M
  
• 183 New 52-Week Highs, 23 New Lows
• 59.7% (+.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 69.0 +2.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 72.6 -.4%
• Bloomberg Cyclicals/Defensives Pair Index 138.0 -.3%
  
• Russell 1000: Growth/Value 19,422.2 -.02%
• CNN Fear & Greed Index 79.0 (Extreme Greed) +1.0
• 1-Day Vix 9.4 -21.5%
  
• Vix 14.1 -3.0%
  
• Total Put/Call .85 -8.6%

Friday Watch

X:

• @Bubblebathgirl - Elizabeth Warren doesn’t want you using a private plane. But she has no problem flying in one herself. Watch as Warren notices she’s caught being a hypocrite so she tries to hide behind one of her aides. (video)
• @dom_lucre - BREAKING: Democrat politicians in Chicago have placed over 3000 illegal immigrants in this one abandoned factory alone. They are taking resources away from the Black community to compensate what they call “The New Americans” what is even more disturbing is the fact that this factory is confidently beside the union building where they are able to register to vote. (video)
• @JunkScience - Billions of taxpayer and consumer dollars are being wasted on 'net zero' policies. Regardless of whether you believe the climate hoax, nothing even remotely close to net zero will ever be achieved no matter how much money is wasted. 'Net zero' is just the 21st century version of 'Workers of the world's unite' -- a slogan to trick you into giving up your freedom. Terrific climate detective work by @TonyClimate: The US government eliminated South Carolina's cooling trend over the last 100 years by mixing or 'homogenizing' (much warmer) urban heat island biased temperature data with (much cooler) rural temperature data. The result is to fraudulently convert cooling into warming. (graph)
  
• @TRHLofficial - Dirty politicians are working tirelessly to plunge our country $93 billion further into debt by alleging “Putin kiIIed a political prisoner!”, all while human rights atrocities against their own political prisoners go on unanswered in their very own DC gitmo.
• @The_Real_Fly - This is the head of Google’s AI Gemini- a devout racist against white people and against Christians.
• @wendyp4545 - I feel so sorry for the FBI informant who's life is being destroyed by the very agency who he worked for putting himself at risk to do the right thing and help them catch the criminals. Now, they're treating him as a criminal all for a talking point by calling him a liar in public to calm their base who are leaving the Democrat party in droves because of all of the corruption they can see and hear. Democrats will destroy anyone that might give them a political advantage. (video)
• @wikileaks - Julian Assange speaking in 2011: "The goal is to use Afghanistan to wash money out of the tax bases of the US and Europe through Afghanistan and back into the hands of a transnational security elite. The goal is an endless war, not a successful war". (video)
• @bennyjohnson - HOLY SMOKES: Charles Payne delivers most BRUTAL takedown of Democrats over political persecution of Trump: "it seems like the whole plan was to make President Trump bow, To humble him. To take away his swag. To break him down... and it keeps backfiring". (video)
• @gatewaypundit - The Fix Is In: New York Judge Merchan in Upcoming NY Trump Criminal Case Is Rapid Leftist Who Donated to Democrats and Sent Trump’s 75-yr-old Former CFO to Prison.
• @VigilantFox - “But who’s moving the stick for the puppet?” The answer is, according to Dr. David Martin: • Bill Gates • The Wellcome Trust • The Rockefeller Foundation. “By 2023, which is kind of where we are right now, Gates represents 88% of the donations to the World Health Organization from donor organizations and agencies. By any definition, that’s a controlling interest.” Bill Gates is no philanthropist; he’s laundering money into the World Health Organization.
• @BGatesIsaPsycho - Bill Gates on Covid. “We didn’t really understand Covid had a low fatality rate”. “It only really affected the elderly - a bit like the flu”. No Shit……. Bill Gates admits what everyone who didn’t succumb to the mass psychosis formation knew from the start. (video) WHO Pandemic Treaty "We are undergoing a soft coup, under the pretext of pandemic preparedness & the biosecurity agenda." Dr. Meryl Nass MEP - “The treaty will remove human right protections, allow censorship & digital passports, will require all Governments to comply with WHO guidance & declare a ‘Pandemic’ whenever they decide too.” (video)
• @TexasLindsay_ - This man is a walking talking encyclopedia of everything the CIA doesn’t want the public to know about. Repetitive language tactics often used by the CIA becomes obvious once you know how to spot it. (video)
• @JamesOKeefeIII - BREAKING: IRS official Alex Mena who works in “Criminal Investigations” says @IRSNews, ‘has no problem going after the small people, putting people in prison, and destroying people’s lives.’ Mena ‘doubts the constitutionality’ of his employer, the IRS, using AI to access everybody’s bank accounts nationwide. (video)
• @WallStreetApes - Colorado Representative Scott Bottoms Confirms That People Are Buying 1-5 Year Old Children For Sex. He Says “Almost all the time, they get off on probation after buying a child and raping a little child.” “These are the times that I am discouraged about my job as a representative and also just what happens here at the capitol. We sat in a committee all day discussing whether or not somebody that buys little children, these are 2, 3, 4, 5 year old kids, They buy them for sex. (video) You Literally Could Not Make This Up If You Tried. The Biden Crime Family Getting Rich Off Obamacare. Biden’s Brother Jim Has No Experience Running Hospitals But Given A Job Advising Americore Joe Biden Was Then Promised Equity In Americore & To Be Put On The Board. American Ranchers Are Desperately Trying To Educate The American People That They Are Being Replaced By Foreign Imports. Thanks To Lobbyists Selling Them Out Legally a “Product of the USA can now be imported from overseas — The US cattle industry is at an all time low”.
• @ShadowofEzra - FOX23 is conducting an investigation with a family who believes that the Covid-19 vaccine led to the death of their daughter. According to the family, all of her organs shut down, and her heart was swollen. (video)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 1,003,176 Reports(+2,451 from prior report) Through January 26th, 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 +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 93.75 -3.25 basis points.

• China Sovereign CDS 61.25 -2.75 basis points.
  
• China Iron Ore Spot 121.4 USD/Metric Tonne +1.4%.

• Bloomberg Emerging Markets Currency Index 40.2 -.3%.
• Bloomberg Global Risk-On/Risk Off Index 72.8 -.09%.
• Volatility Index(VIX) futures 14.9 -.9%.
• Euro Stoxx 50 futures +.08%

• S&P 500 futures unch.

• NASDAQ 100 futures -.08%.  

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 mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.