Thursday Watch

Night Trading 

• Asian equity indices are -.5% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 108.25 -3.25 basis points.

• China Sovereign CDS 67.25 -2.25 basis points.
  
• China Iron Ore Spot 117.4 USD/Metric Tonne +1.7%.

• Bloomberg Emerging Markets Currency Index 39.3 +.07%.
• Bloomberg Global Risk-On/Risk Off Index 65.1 -1.5%.
• Volatility Index(VIX) futures 15.7 -2.3%.
• Euro Stoxx 50 futures -.14%.

• S&P 500 futures +.51%.

• NASDAQ 100 futures +.65%.  

Morning Preview Links

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

Stocks Surging into Final Hour on Rising Fed Rate-Cut Odds, Earnings Outlook Optimism, Short-Covering, Financial/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.6-.19%
• DJIA Intraday % Swing .48 -52.4%
  
• Bloomberg Global Risk On/Risk Off Index 63.3 -6.4%

• Euro/Yen Carry Return Index 183.4 unch.

• Emerging Markets Currency Volatility(VXY) 7.07 +.43%

• CBOE S&P 500 Implied Correlation Index 19.7 +9.1% 

• ISE Sentiment Index 138.0 +24.0
  

• Total Put/Call .98 +4.3%

• NYSE Arms .92 -43.6%
  
• NYSE Non-Block Money Flow -$107.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 52.5 -1.9%
  

• US Energy High-Yield OAS 264.2 +1.5%
• Bloomberg TRACE # Distressed Bonds Traded 291 +6
  

• European Financial Sector CDS Index 64.7 +2.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 192.0 +1.6%
  

• Italian/German 10Y Yld Spread 133.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 113.7 +1.7%
  

• Emerging Market CDS Index 172.3 -3.1%
  
• Israel Sovereign CDS 131.9 -.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.4 +.1%

• 2-Year SOFR Swap Spread -6.25 basis points +1.0 basis point
  

• Treasury Repo 3M T-Bill Spread 9.75 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 unch.
  
• MBS  5/10 Treasury Spread 149.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 771.0 -2.0 basis points
  
• Avg. Auto ABS OAS 58.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.3 +.08%
• 3-Month T-Bill Yield 5.41% +1.0 basis point
  

• China Iron Ore Spot 116.2 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 28.7 euros/megawatt-hour -1.3%

• Citi US Economic Surprise Index 2.0 -5.6 points

• Citi Eurozone Economic Surprise Index 28.7 -1.2 points

• Citi Emerging Markets Economic Surprise Index 32.7 -1.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(309 of 500 reporting) +5.2% +1.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 254.20 +.52:  Growth Rate +13.9% +.2 percentage point, P/E 19.7 -.3
  
• S&P 500 Current Year Estimated Profit Margin 12.88% +3.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +57.2% +14.8 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 319.89 +.73: Growth Rate +33.1% +.3 percentage point, P/E 30.2 -.7
  
• Bloomberg US Financial Conditions Index 1.02 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .94 -1.0 basis point
  
• US Yield Curve -33.75 basis points (2s/10s) +2.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +3.9% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 39.5% -1.1 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% unch.
  
• 10-Year TIPS Spread 2.37 -3.0 basis points
  
• Highest target rate probability for June 12th FOMC meeting: 82.5%(-7.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 69.7%(-7.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +212 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating +163 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.3%
  

Sector Underperformers:

• 1) Restaurants -4.3% 2) Semis -3.0% 3) Energy -2.3%

Stocks Falling on Unusual Volume: 

• RSG, BLCO, COR, CLX, GNRC, ENLC, GTES, FLEX, DAY, JCI, CG, SITE, TXG, SQ, EXEL, CDW, GPN, EL, NCLH, HI, DBRG, SWKS, RYI, OI, CVS, SBUX, LEG and CGC
  

Stocks With Unusual Put Option Activity:

• 1) NYCB 2) JCI 3) CVS 4) SBUX 5) IQ
  

Stocks With Most Negative News Mentions:

• 1) SBUX 2) CVS 3) SQ 4) SMCI 5) SITE
  

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) XLF 3) GDX 4) XLY 5) XBI

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%
  

Sector Outperformers:

• 1) Social Media +3.0% 2) Regional Banks +2.6% 3) Biotech +1.2%

Stocks Rising on Unusual Volume:

• TMDX, POWL, WGS, ATEN, PINS, TECH, TGTX, NARI, GRMN, XNCR, PRCT, CRS, OSW, TRN, AX, BEP, LIVN, BEPC, AXTA, DOCN, UTHR, VRSK, DD, CABA, CLH, COCO, DAN, RYAN, CHEF, MCY, AY, HTLD, SNAP, HUM, ANAB, PEN, JNJ, HLIT, MMSI, ARCT, ADP, PLRX and THC
  

Stocks With Unusual Call Option Activity:

• 1) DLO 2) CHPT 3) IEF 4) SYF 5) NCLH

Stocks With Most Positive News Mentions:

• 1) POWL 2) PINS 3) TGTX 4) GRMN 5) USAP
  

Sector ETFs With Most Positive Money Flow:

• 1) XLP 2) XLK 3) XLI 4) IDU 5) KBE
  

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:

• (AGCO)/2.26
• (APTV)/1.02
• (MT)/.91
• (BAX)/.61
• (BDX)/2.97
• (BWA)/.87
• (CAH)/1.95
• (CNHI)/.27
• (CGNX)/.07
• (COP)/2.04
• (CMI)/5.06
• (EXC)/.70
• (ICE)/1.48
• (IRM)/1.06
• (ITRI)/.84
• (ITT)/1.36
• (LAMR)/1.47
• (MRNA)/-3.56
• (PH)/6.12
• (BTU)/.31
• (PENN)/-.59
• (PWR)/1.29
• (REGN)/10.18
• (SEE)/.53
• (SHAK)/.10
• (SO)/.90
• (SWK)/.55
• (CI)/6.22
• (VMC)/.74
• (ZBH)/1.87
• (ZTS)/1.34
  

After the Close: 

• (AES)/.34
• (AAPL)/1.51
• (SQ)/.72
• (BKNG)/13.98
• (COIN)/1.15
• (ED)/1.90
• (DLR)/1.62
• (DKNG)/-.29
• (LOCO)/.14
• (EXPE)/-.14
• (FTNT)/.38
• (ILMN)/.04
• (IR)/.69
• (MTZ)/-.48
• (MELI)/6.10
• (MNST)/.43
• (PXD)/5.00
• (RMAX)/.19 
• (TXRH)/1.63
• (TDW)/.63
• (X)/.82
• (OLED)/1.07
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for April.
  

8:30 am EST

• 1Q Non-Farm Productivity is estimated to rise +.7% versus a +3.3% gain in 4Q.
• The Trade Balance for March is estimated to widen to -$69.7B versus -68.9B in Feb.
• Unit Labor Costs for 1Q is estimated to rise +3.6% versus a +.4% gain in 4Q.
• Initial Jobless Claims for last week are estimated to rise to 212K versus 207K the prior week.
• Continuing Claims are estimated to rise to 1793K versus 1781K prior.
  

10:00 am EST

• Factor Orders for March is estimated to rise +1.6% versus a +1.4% gain in Feb.
• Final Durable Goods Orders readings.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The weekly Fed Balance Sheet report, weekly MBA Mortgage Applications report, (UPS) annual meeting, (BSX) annual meeting, (KMB) annual meeting, (LMT) annual meeting, (GLW) annual meeting, (R) annual meeting, (PZZA) annual meeting and the (RTX) 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 +5.7% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.5 -1.0
  
• 5 Sectors Declining, 6 Sectors Rising
• 53.2% of Issues Advancing, 44.7% Declining 
• TRIN/Arms .94 -42.3%
  
• Non-Block Money Flow -$101.6M
  
• 21 New 52-Week Highs, 30 New Lows
• 53.8% (+1.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.0 -5.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 65.8 -2.7%
• Bloomberg Cyclicals/Defensives Pair Index 140.5 -1.0%
  
• Russell 1000: Growth/Value 18,828.1 +.02%
• CNN Fear & Greed Index 42.0 (Fear) unch.
  
• 1-Day Vix 17.9 -1.2%
  
• Vix 15.7 +.5%
  
• Total Put/Call .92 -2.1%