Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.0 +2.75 basis points.

• China Sovereign CDS 50.25 +2.5 basis points.
  
• China Iron Ore Spot 102.5 USD/Metric Tonne +.2%

• Bloomberg Emerging Markets Currency Index 37.4 -.08%.
• Bloomberg Global Risk-On/Risk Off Index 71.9 +1.1%.
• Volatility Index(VIX) futures 22.3 -1.7%.
• Euro Stoxx 50 futures +.19%

• S&P 500 futures +.56%.

• NASDAQ 100 futures +.71%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by tech and real estate shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on Tariff Uncertainties, Global Growth Worries, Earnings Outlook Jitters, Consumer Discretionary/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 25.4 +5.0%
• S&P 500 Intraday % Swing 1.4 -20.6%.
  
• Bloomberg Global Risk On/Risk Off Index 71.2 -2.3%

• Euro/Yen Carry Return Index 179.6 -.6%

• Emerging Markets Currency Volatility(VXY) 8.0 -.8%

• CBOE S&P 500 Implied Correlation Index 27.5 +1.9% 

• ISE Sentiment Index 117.0 -28.0 points
  

• Total Put/Call .94 +4.4%

• NYSE Arms .74 -33.9%
• NYSE Non-Block Money Flow -$340.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 57.1 +2.9%
  

• US Energy High-Yield OAS 378.0 +5.7%
• Bloomberg TRACE # Distressed Bonds Traded 226.0 -1.0

• European Financial Sector CDS Index 62.9 +4.4%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 140.5 +2.5%
  

• Italian/German 10Y Yld Spread 114.0 basis points +2.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 73.2 +1.5%
  

• Emerging Market CDS Index 164.4 +1.9%
• Israel Sovereign CDS 81.8 -.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.27 -.20%

• 2-Year SOFR Swap Spread -16.5 basis points +.5 basis point

• 3M T-Bill Treasury Repo Spread -.5 basis point +3.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -.5 -.5 basis point
• MBS  5/10 Treasury Spread 139.0 +1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 593.0 +5.0 basis points
• Avg. Auto ABS OAS 51.0 +2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.4 -.01%
• 3-Month T-Bill Yield 4.30% unch.

• China Iron Ore Spot 102.1 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 42.1 euros/megawatt-hour -.4%

• Citi US Economic Surprise Index -6.2 +1.8 points

• Citi Eurozone Economic Surprise Index 23.1 +1.0 point

• Citi Emerging Markets Economic Surprise Index 3.0 -1.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) +13.2% -.3 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.31 +.76:  Growth Rate +12.6% +.3 percentage point, P/E 20.0 -.2
• S&P 500 Current Year Estimated Profit Margin 13.57% -3.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +32.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 410.94 +.20: Growth Rate +18.8% unch., P/E 28.6 -.6
• Bloomberg US Financial Conditions Index .12 +9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.25 +19.0 basis points
• US Yield Curve 32.5 basis points (2s/10s) +1.0 basis point
• US Atlanta Fed GDPNow Q1 Forecast -2.41% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 34.8% -.6 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.46% unch.
• 10-Year TIPS Spread 2.31 -3.0 basis points
• Highest target rate probability for May 7th FOMC meeting: 64.5% (-7.3 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 55.9%(-1.6 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -170 open in Japan 
• China A50 Futures: Indicating +68 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

• Slightly Lower: On losses in my financial/consumer discretionary/tech sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Value -2.6%
  

Sector Underperformers:

• 1) Internet -2.8% 2) Computer Hardware -2.7% 3) Homebuilding -2.6%

Stocks Falling on Unusual Volume: 

• PH, FSK, WB, H, AAL, STLA, MTDR, ISRG, AEO, JUTU, PCAR, S, TTAN, HD, CION, DASH, ULTA, SITM, VNET, OSIS, IBKR, ZIM, TPG, TEAM, CAR, LYV, TTD, HSAI, LLYVK, RVLV, RH, ADBE, PATH and ATEN

Stocks With Unusual Put Option Activity:

• 1) DXJ 2) ADBE 3) RBRK 4) AEO 5) NFE

Stocks With Most Negative News Mentions:

• 1) PATH 2) CRM 3) TTD 4) ACTG 5) ADBE

Sector ETFs With Most Negative Money Flow:

• 1) SMH 2) XLC 3) XBI 4) KRE 5) KBE

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.6%

Sector Outperformers:

• 1) Gold & Silver +2.0% 2) Insurance +.4% 3) Steel +.1%

Stocks Rising on Unusual Volume:

• INTC, NN, PHR, FN, XPOF, CPRI, DLTR, GIII, XPEV, DG, SLNO, NEM, FIS, SSRM and SLKT

Stocks With Unusual Call Option Activity:

• 1) JNPR 2) PRMW 3) ADBE 4) HNRG 5) MUB

Stocks With Most Positive News Mentions:

• 1) AVAH 2) INTC 3) FFNW 4) BLDE 5) GIII

Sector ETFs With Most Positive Money Flow:

• 1) XLY 2) KBWB 3) XLP 4) XLE 5) IBB

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:

• (BKE)/1.39
• (GOGO)/.03
• (LI)/2.89
  

After the Close: 

• None of note

Economic Releases

10:00 am EST

• Univ. of Mich. Consumer Sentiment for March is estimated to fall to 63.0 versus 64.7 in Feb.
• Univ. of Mich. 1Y Inflation Expectations for March is estimated to rise +4.2% versus a +4.3% gain in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The government funding deadline, CFTC speculative net positioning reports, US Baker Hughes total Rig Count, (MELI) Morgan Stanley analyst meeting, (PPC) investor day, (OI) investor day and the (WEX) investor 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 +5.9% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.7 +.9
• 9 Sectors Declining, 2 Sectors Rising
• 34.4% of Issues Advancing, 63.7% Declining 
• TRIN/Arms .80 -29.5%
  
• Non-Block Money Flow -$320.9M
  
• 6 New 52-Week Highs, 74 New Lows
• 34.3% (-3.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 30.2 -.8

Other:

• Bloomberg Global Risk-On/Risk-Off Index 71.5 -1.9%
• Bloomberg Cyclicals/Defensives Index 232.0 -.4%
  
• Russell 1000: Growth/Value 19,729.7 -1.4%
• CNN Fear & Greed Index 18.0 (EXTREME FEAR) +1.0
• 1-Day Vix 22.0 -4.8%
  
• Vix 24.7 +2.1%
  
• Total Put/Call .85 -5.6%