Stocks Slightly Lower into Final Hour on US Economic Data, Technical Selling, Profit-Taking, Pharma/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.3 -.9%
• S&P 500 Intraday % Swing .41 -58.4%.
  
• Bloomberg Global Risk On/Risk Off Index 77.7 +1.2%

• Euro/Yen Carry Return Index 181.2 -.6%

• Emerging Markets Currency Volatility(VXY) 8.3 -1.7%

• CBOE S&P 500 Implied Correlation Index 20.5 +2.5% 

• ISE Sentiment Index 140.0 +8.0 points
  

• Total Put/Call .78 unch.

• NYSE Arms 1.0 +40.9%
• NYSE Non-Block Money Flow -$71.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 56.9 -.31%
  

• US Energy High-Yield OAS 344.5 +1.0%
• Bloomberg TRACE # Distressed Bonds Traded 213.0 -11.0

• European Financial Sector CDS Index 62.0 -2.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 142.3 -1.3%
  

• Italian/German 10Y Yld Spread 110.0 basis points unch.

• Asia Ex-Japan Investment Grade CDS Index 76.4 -.4%
  

• Emerging Market CDS Index 178.4 -.9%
• Israel Sovereign CDS 86.5 -1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.3 unch.

• 2-Year SOFR Swap Spread -17.75 basis points -.25 basis point

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

• 3-Month EUR/USD Cross-Currency Basis Swap .25 +.25 basis point
• MBS  5/10 Treasury Spread 139.0 +1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 601.0 unch.
• Avg. Auto ABS OAS 58.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.9 +.12%
• 3-Month T-Bill Yield 4.28% -1.0 basis point

• China Iron Ore Spot 102.0 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 42.8 euros/megawatt-hour +.3%

• Citi US Economic Surprise Index -4.6 -2.1 points

• Citi Eurozone Economic Surprise Index 32.0 +.2 point

• Citi Emerging Markets Economic Surprise Index 8.7 +4.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(14 of 500 reporting) +8.2% -.2 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.98 +.15:  Growth Rate +12.9% +.1 percentage point, P/E 20.8 +.1
• S&P 500 Current Year Estimated Profit Margin 13.57% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 417.18 +4.32: Growth Rate +20.6% +1.2 percentage points, P/E 29.8 +.1
• Bloomberg US Financial Conditions Index .45 +15.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.56 +18.0 basis points
• US Yield Curve 30.25 basis points (2s/10s) +1.25 basis points
• US Atlanta Fed GDPNow Q1 Forecast -1.76% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 32.5% -2.6 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.47% +1.0 basis point
• 10-Year TIPS Spread 2.35 -1.0 basis point
• Highest target rate probability for June 18th FOMC meeting: 61.5% (+3.0 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 49.3%(+.7 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +35 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +251 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/financial/industrial sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.4%
  

Sector Underperformers:

• 1) Gambling -2.2% 2) Biotech -1.8% 3) Pharma -1.5%

Stocks Falling on Unusual Volume: 

• ATAT, KBH, UPS and PONY

Stocks With Unusual Put Option Activity:

• 1) YMM 2) XRX 3) SLNO 4) YPF 5) DFS

Stocks With Most Negative News Mentions:

• 1) ME 2) UNF 3) OKLO 4) UPS 5) KBH

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) XLV 3) XLC 4) IXN 5) XLY

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.2%

Sector Outperformers:

• 1) Gold & Silver +2.1% 2) Video Gaming +1.3% 3) Cyber Security +1.1%

Stocks Rising on Unusual Volume:

• PSIX, MBLY, EPAC, DJT, IP, EGO, CSIQ, DQ, AXGN, ADNT, SBS, SARO, CRWD and TITN

Stocks With Unusual Call Option Activity:

• 1) BTU 2) NNDM 3) SLNO 4) PRMW 5) COF

Stocks With Most Positive News Mentions:

• 1) MBLY 2) FUFU 3) NET 4) CVNA 5) CRWD

Sector ETFs With Most Positive Money Flow:

• 1) KRE 2) XLI 3) XOP 4) IGV 5) SMH

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:

• (CHWY)/.03
• (CTAS)/1.05
• (DLTR)/2.20
• (JKS)/-3.01
• (PAYX)/1.48
• (TH)/.07
  

After the Close: 

• (FUL)/.50
• (JEF)/.94
• (WOOF)/.00
• (SCS)/.20
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Feb. is estimated to fall -1.0% versus a +3.2% gain in Jan.
• Durables Ex Transports for Feb. is estimated to rise +.2% versus unch. in Jan.
• Cap Goods Orders Non-Defense Ex-Air for Feb. is estimated to rise +.2% versus a +.8% gain in Jan.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,215,400 barrels versus a +1,745,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,728,200 barrels versus a -527,000 barrel decline the prior week. Distillate inventories are estimated to fall by -918,400 barrels versus a -2,812,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.04% versus a +.4% gain prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Musalem speaking, 5Y T-Note auction, weekly MBA Mortgage Applications report, CIBC Retail/Consumer Conference and the UBS Energy Conference 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 -9.4% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.8 +.9
• 4 Sectors Declining, 7 Sectors Rising
• 51.5% of Issues Advancing, 45.7% Declining 
• TRIN/Arms 1.34 +88.8%
  
• Non-Block Money Flow -$13.8M
  
• 43 New 52-Week Highs, 19 New Lows
• 42.5% (+.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.3 +.5

Other:

• Bloomberg Global Risk-On/Risk-Off Index 78.1 +1.8%
• Bloomberg Cyclicals/Defensives Index 243.3 +1.4%
  
• Russell 1000: Growth/Value 20,035.3 +.6%
• CNN Fear & Greed Index 29.0 (FEAR) +1
• 1-Day Vix 9.9 -24.2%
  
• Vix 17.4 -.6%
  
• Total Put/Call .73 -6.4%

Tuesday Watch

Around X:

• @elonmusk

• That is the fundamental question. Why did the federal judiciary turn a blind eye to the importation of millions of illegals, but now is apoplectic over any action to remove them? How is this anything other than extremely partisan politics masquerading as jurisprudence? (pic)
• Shocking as it may seem that DC bureaucrats gave SBA loans to infants, it shouldn’t be—considering that this kind of fraud becomes increasingly inevitable when a government simply becomes too big to be held accountable. That’s why the
  @DOGE effort must culminate in a permanent restructuring of how, where, and to what degree the federal government may spend our money. (video) 
• @SecretaryBurgum announces $830 million in savings at @Interior by cutting contracts for useless surveys. (video)

• @DC_Draino

• It is not a coincidence that just as Trump & Elon started disassembling the USAID money laundering machine, we now see organized violence against Tesla across the US. USAID funded Deep State regime overthrow operations across the world. Now they’re using those same funds & tactics to try and stop the Trump admin from cutting them off. Start arresting the culprits.

• @MarioNawful

• ACTIVIST JUDGES SILENT AS MILLIONS ENTERED THE U.S. ILLEGALLY—BUT GO CRAZY WHEN TRUMP TRIES TO REMOVE THEM. The federal judiciary turned a blind eye as millions of illegals flooded the country—citing “executive discretion” and refusing to intervene. But the moment Trump acts to enforce the law and remove them, the same judges scream “unconstitutional” and block every move. Why? It’s simple: mass importation helps Democrats. Deportation? It threatens their plan. This isn’t law—it’s partisan politics in a robe. 100.

• @WarClandestine

• The more I read the JFK files, the more I’m convinced that 2020 was an organized regime-change operation, by the CIA and their subsidiaries. The release of C19 was economic sabotage via biological agent, just like Project Mongoose. It destroyed Trump’s economy, and gave the Deep State a platform to launch their full-scale propaganda campaign to oust Trump in the election. The failing economy, loss of jobs, shutdowns, etc., were all blamed on Trump, and it worked.

• @LeadingReport

• BREAKING: Missouri is moving quickly to seize Chinese-owned farmland and other assets in a bid to collect its landmark $24 billion civil judgment against Beijing for harm caused by the COVID-19 pandemic, Attorney General Andrew Bailey says.

• @Libsoftiktok
  

• CNN is forced to admit that 63% of Americans favor deporting criminal illegal aliens. “That’s a pretty high number…” (video)
• Since Trump took office, a staggering $2.924 trillion in investment has flowed into the United States: - UAE $1.4 trillion - Saudi Arabia $600 billion - Hyundai $20 billion - Apple $500 billion - Nvidia over $100 billion - SoftBank, Oracle, OpenAI $100 billion - TSMC $100 billion - Johnson & Johnson $55 billion - CMA CGM Group $20 billion - Eli Lilly $27 billion - Merck $1 billion - GE Aerospace $1 billion.

• @Lisssa0114
  

• The @gatesfoundation has had an incredible impact on global health. CDC works closely with the @gatesfoundation to fight polio and other global health threats. Great to touch base last night on those efforts – public health is a team sport! This is who
  @POTUS nominated as CDC director. (pic)

• @Liz_Wheeler

• If reports are true—and I pray they are—that RFK Jr. is gonna ban Big Pharma ads on TV, a massive society earthquake is about to happen on two fronts. #1: The corporate media will fail. You will watch before your very eyes as highly paid MSM anchors are fired, networks panic & some shut down, and paychecks aren’t paid. The entire business of MSM is a fake business. It’s artificially propped up by massive ad dollars from Pharma ads. Not because of the return on investment that Pharma sees peddling their drugs on TV, but rather because of WHY Pharma buys so many TV ads in the first place, which is to prevent reporting on Pharma corruption.

• @WallStreetApes

• Democrats are DESTROYING California. San Diego residents are protesting because Democrats are ending “no cost trash pick up, which had been in effect for more than a century”. New cost is $55-$65 per month. Legislation has built in price increases for the coming years. (video)
• ‘Conspiracy theorists’ are right AGAIN. James O’Keefe undercover footage of a U.S. Treasury Policy Advisor on tape telling us 23andMe has been sharing consumer data with "pharmaceutical companies”. Conspiracy theorists are literally never wrong. (video) 
• Democrat corruption is OUT OF CONTROL. Democrats in Maine handed their 400 page $11.3 billion dollar budget to Maine Rep Billy Bob Faulkingham at 12:30 pm. They said “Amendments had to be ready by 4:30 pm”. “How do you amend 400 pages of unbalanced garbage in 4 hours? You don’t”. (video)

• @annvandersteel

• ATTN Pam Bondi: THE CASE AGAINST ANTHONY FAUCI ALL LAID OUT FOR YOU: Anthony Fauci was given a 68% raise by the military for GAIN OF FUNCTION RESEARCH. Which turned out to be CODE for DEVELOPING BIO-WEAPONS, then developing a DEFENSE to those BIO-WEAPONS. Which he did UNDER OBAMA right up to 2014… …when some of HIS EXTREMELY DEADLY SUPER BUGS escaped from different US labs.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 76.5 -1.0 basis point.

• China Sovereign CDS 49.5 -2.5 basis points.
  
• China Iron Ore Spot 102.2 USD/Metric Tonne -.1%

• Bloomberg Emerging Markets Currency Index 36.9 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 74.1 -3.5%.
• Volatility Index(VIX) futures 18.1 +.2%.
• Euro Stoxx 50 futures +.02%

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.05%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by tech and consumer discretionary 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.