Stocks Modestly Higher into Final Hour on Stable Long-Term Rates, Meme Stock Frenzy, Short-Covering, Consumer Discretionary/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.9 -2.4%
• DJIA Intraday % Swing .33 -52.9%
  
• Bloomberg Global Risk On/Risk Off Index 68.4 -.06%

• Euro/Yen Carry Return Index 178.1 +.03%

• Emerging Markets Currency Volatility(VXY) 6.3 -1.9%

• CBOE S&P 500 Implied Correlation Index 11.6 -5.7% 

• ISE Sentiment Index 161.0 +14.0
  

• Total Put/Call .96 -6.8%

• NYSE Arms .98 +38.0%
  
• NYSE Non-Block Money Flow +$27.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 52.5 +.08%
  

• US Energy High-Yield OAS 281.4 +.3%
• Bloomberg TRACE # Distressed Bonds Traded 284 -5
  

• European Financial Sector CDS Index 64.7 +.49%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 188.4 -.7%
  

• Italian/German 10Y Yld Spread 130.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 102.8 -.1%
  

• Emerging Market CDS Index 168.71 +.19%
  
• Israel Sovereign CDS 117.2 -2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.6 +.15%

• 2-Year SOFR Swap Spread -7.5 basis points +2.75 basis points
  

• Treasury Repo 3M T-Bill Spread 4.75 basis points -2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.0 -1.25 basis points
  
• MBS  5/10 Treasury Spread 137.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 785.0 +1.0 basis point
  
• Avg. Auto ABS OAS 61.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.7 unch.
• 3-Month T-Bill Yield 5.36% -2.0 basis points
  

• China Iron Ore Spot 104.0 USD/Metric Tonne -.09%
• Dutch TTF Nat Gas(European benchmark) 27.1 euros/megawatt-hour -4.8%

• Citi US Economic Surprise Index 31.0 -1.5 points

• Citi Eurozone Economic Surprise Index 43.9 -.8 point

• Citi Emerging Markets Economic Surprise Index 17.3 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(13 of 500 reporting) +40.2% -.5 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 249.85 +.07:  Growth Rate +12.0% +.1 percentage point, P/E 20.9 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.84% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 311.35 +.12: Growth Rate +29.6% +.1 percentage point, P/E 32.7 +.3
  
• Bloomberg US Financial Conditions Index 1.13 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index 1.07 +7.0 basis points
  
• US Yield Curve -36.5 basis points (2s/10s) +1.25 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.1% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 56.0% +.6 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.78% unch.: CPI YoY +3.41% +4.0 basis points
  
• 10-Year TIPS Spread 2.32 -2.0 basis points
  
• Highest target rate probability for June 12th FOMC meeting: 61.0%(-2.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 31st meeting: 48.2%(-.1 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +117 open in Japan 
• China A50 Futures: Indicating -20 open in China

• DAX Futures: Indicating +280 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value +.1%
  

Sector Underperformers:

• 1) Utilities -.8% 2) Road & Rail -.6% 3) Energy -.6%

Stocks Falling on Unusual Volume: 

• MTDR, CMP, IP, CEIX, GSHD, UPS and CDLX
  

Stocks With Unusual Put Option Activity:

• 1) RDDT 2) DJT 3) CSX 4) UPS 5) IP
  

Stocks With Most Negative News Mentions:

• 1) CEIX 2) SHLS 3) BTTR 4) ARCH 5) LEA
  

Sector ETFs With Most Negative Money Flow:

• 1) XHB 2) XBI 3) XLV 4) SOXX 5) XRT

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%
  

Sector Outperformers:

• 1) Gambling +2.3% 2) Computer Hardware +1.9% 3) Social Media +1.2%

Stocks Rising on Unusual Volume:

• STOK, DJT, DNUT, VKTX, RDDT, SMTC, ENTA, APPF, MKC, TNDM, BE, STX, NVEI, STNE, TRUP, ITOS, PENN, REVG, KYTX, SNX, WDC, HROW, NMRA, NARI, PAGS, INO, BFH, CZR, TSLA, ARHS, PHAT, ECVT, DPZ, WS, DAWN, AMR and CLBT
  

Stocks With Unusual Call Option Activity:

• 1) RDDT 2) NVEI 3) FULC 4) MKC 5) KDP

Stocks With Most Positive News Mentions:

• 1) STOK 2) RDDT 3) VKTX 4) CHEK 5) APPF
  

Sector ETFs With Most Positive Money Flow:

• 1) XLI 2) PPA 3) FTEC 4) COPX 5) XLK

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:

• (CTAS)/3.58
• (CCL)/-.18
  

After the Close: 

• (BB)/-.04
• (FUL)/.64
• (JEF)/.75
• (RH)/1.67
• (VRNT)/.97
  

Economic Releases

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -300,000 barrels versus a -1,952,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,425,000 barrels versus a -3,310,000 barrel decline the prior week. Distillate inventories are estimated to rise by +25,000 barrels versus a +624,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.23% versus a +1.0% gain prior.
  

Upcoming Splits 

• (ODFL) 2-for-1
  

Other Potential Market Movers

• The Fed's Waller speaking, 7Y T-Note auction, weekly MBA Mortgage Applications report, Jefferies Value Retail Summit, (KMB) investor day, (GTLB) investor meeting, (MKC) annual meeting and the BofA Automotive Conference 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 -7.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.3 +1.5
  
• 3 Sectors Declining, 8 Sectors Rising
• 56.3% of Issues Advancing, 42.0% Declining 
• TRIN/Arms .97 +36.6%
  
• Non-Block Money Flow +$83.5M
  
• 120 New 52-Week Highs, 27 New Lows
• 61.0% (+.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 66.0 -1.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 68.2 -.4%
• Bloomberg Cyclicals/Defensives Pair Index 143.0 +.2%
  
• Russell 1000: Growth/Value 19,220.7 +.03%
• CNN Fear & Greed Index 70.0 (Greed) +2.0
  
• 1-Day Vix 7.3 -9.8%
  
• Vix 12.9 -2.0%
  
• Total Put/Call .92 -10.7%

Tuesday Watch

Evening Headlines

Bloomberg: 

• US, UK Accuse China of Broad Cyberattacks, Voter Data Theft.
• Asian Traders Cautious as Wall Street Surge Stalls.
• Oil Holds Advance With OPEC+ Cutbacks and Geopolitics in Focus.
• Biggest Challenge Facing New Boeing CEO Is Winning Over Airlines.
• Cocoa Is More Expensive Than Copper as It Tops $9,000.
• Five Things You Need to Know to Start Your Day: Asia.
  

Zero Hedge:

• Live ZeroHedge Debate: "Should Trump Be The Next U.S. President?".
• Diddy Flee? Sean Combs' Private Jet Tracked To Caribbean Island After Raids.
• UK Court To Issue Ruling On Julian Assange Extradition Tuesday Morning.
• Most Americans Believe US Will Be In World War Within Next Decade.
• Israel Angrily Halts Delegation To D.C. After US Allows UN Ceasefire Resolution To Pass.
• From Riot To Insurrection To Terrorism: January 6th Continues To Be A Tragedy In The Eye Of The Beholder.
• "It's A Far Deeper Recession Than Publicized..." Dallas Fed Manufacturing Survey Screams Stagflation.
• Will DEI End America... Or America End DEI?
• Frenzy of Flows and Fades.
• Another Silly Progressive Idea: New Green Deal For Public Housing.
• ZH Geopolitical Week Ahead: Putin Asks 'Who Was Really Behind' Crocus Hall Terror Attack.
• US stocks finished mostly lower in choppy trade with early tech headwinds - Newsquawk Asia-Pac Market Open.
• Former Defense Secretary Says Jan. 6 Committee Issued "Latent Threat" To Keep Quiet.
• The Norwegian Illusion: EVs Are Not More Energy Efficient.
• Not-So 'Broke' Don: Trump Net Worth Tops $6.4 Billion On SPAC Deal.
• Bonds fall and stocks chop ahead of key risk events into month-end - Newsquawk US Market Wrap.
• In Blob We Trust.
• Bitcoin, Bond Yields, & Black Gold Bounce Amid Big Auction & Bad Data.
• Hysterical Harvard Protesters Throw Fit Over Concert By Israeli Singer.

Wall Street Journal:

• Hospitals Are Adding Billions in ‘Facility’ Fees for Routine Care.
• Florida Law Bans Social Media for Minors Under 14.

CNBC.com:

• Adam Neumann makes a $500 million bid for WeWork that could hit $900 million if financing and diligence firm up.
• Reddit shares rise 30% to start week after social media company’s IPO.
• FTX estate selling majority stake in AI startup Anthropic for $884 million, with bulk going to UAE.
• Shohei Ohtani says his interpreter stole money from his account and ‘told lies’.

MarketWatch.com: 

• Fisker warns of possible ‘event of default’ following NYSE move to delist stock.
• DWAC’s stock surge gives a $1 billion boost to the value of Trump’s stake.
• Why have earnings fallen over the last two years while the economy has grown?

Newsmax:

• Ex-AG Matthew Whitaker to Newsmax: N.Y. Courts Fearful of Becoming 'Joke'.

Fox News:

• Republican control of the House of Representatives could flip — before the November elections.
• US issues warning to Americans in France on heels of Moscow attack.
• Fast food restaurants laying off workers ahead of blue state’s $20 minimum wage law.

TheGatewayPundit.com:

• BREAKING: Appellate Court Rules Trump Can Post $175 Million Bond to Cover Letitia James’ Judgment – Trump Responds (VIDEO).
• Kate Starbird Led the Censorship Efforts Against Gateway Pundit in 2022 – Now Her Goal Is to Control Your Speech on X.
• BREAKING: Feds Raid Rapper Sean “Diddy” Combs Miami and Los Angeles Homes (VIDEO).
• Minnesota Democrat Introduces Legislation to Make it Legal for Women to go Topless, Citing “Gender Identity”.
• Chicago Alderman Byron Sigcho Lopez Speaks Outside City Hall in Front of Burned American Flag.
• Netanyahu Cancels Israel Delegation Trip to US After UN Security Council Ceasefire Resolution Tied to Ramadan Passes With Biden Admin Abstention.
• Ohio Volunteers Uncover Massive Irregularities in Voter Database.
• Flashback: Maricopa County Board of Supervisors’ Chairman, Jack Sellers, Has Close Ties with China – Is This Why He’s Fighting So Hard Against the Senate’s 2020 Election Audit in Maricopa County?
• Woke Best Buy Announces Closure of 24 Stores This Year with an Additional 10-15 Expected by Next Year.
• Japanese Preprint Study Urges Halt on mRNA Vaccines Amid Blood Bank Contamination Fears.
• Over 200,000 Deportation Cases Dismissed After Biden Regime Failed to File Required Paperwork.
• “Future of Democracy Depends on Making Sure Republicans Are Not in the Majority” – Liz Cheney Is Now Campaigning for the Defeat of ALL Republicans in 2024 (VIDEO).
• ‘We Want It Now’: Black Clergy Demand $15 Billion in Reparations From ‘White Churches’ in Boston.

The Epoch Times:

• Trump Win Would Be Detrimental for the CCP.
• US Sanctions Chinese Hackers Over 14-Year Scheme to Infiltrate Critical Infrastructure.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 1,007,636 Reports(+4,460 from prior report) Through February 23rd, 2024.

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 103.0 unch.

• China Sovereign CDS 70.25 unch.
  
• China Iron Ore Spot 108.6 USD/Metric Tonne -.01%.

• Bloomberg Emerging Markets Currency Index 39.7 unch.
• Bloomberg Global Risk-On/Risk Off Index 69.0 +.8%.
• Volatility Index(VIX) futures 14.3 -.7%.
• Euro Stoxx 50 futures +.02%

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.17%.  

Morning Preview Links

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