Stocks Falling into Final Hour on Rising Trade War Angst, Global Growth Worries, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sector Declining

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 18.9 +9.9%
• S&P 500 Intraday % Swing 1.1 +140.3%.
  
• Bloomberg Global Risk On/Risk Off Index 76.1 -1.8%

• Euro/Yen Carry Return Index 181.4 +.1%

• Emerging Markets Currency Volatility(VXY) 8.3 +.1%

• CBOE S&P 500 Implied Correlation Index 22.1 +11.6% 

• ISE Sentiment Index 129.0 -14.0 points
  

• Total Put/Call .99 +26.9%

• NYSE Arms .90 -26.2%
• NYSE Non-Block Money Flow -$155.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 58.3 +2.6%
  

• US Energy High-Yield OAS 355.7 +3.6%
• Bloomberg TRACE # Distressed Bonds Traded 205.0 -8.0

• European Financial Sector CDS Index 63.5 +2.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 142.9 +.5%
  

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

• Asia Ex-Japan Investment Grade CDS Index 76.3 -.3%
  

• Emerging Market CDS Index 179.9 +1.0%
• Israel Sovereign CDS 87.9 +1.7%
  

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

• 2-Year SOFR Swap Spread -17.0 basis points +.75 basis point

• 3M T-Bill Treasury Repo Spread -2.0 basis points +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap .75 +.5 basis point
• MBS  5/10 Treasury Spread 139.0 unch.
• 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 -.2%
• 3-Month T-Bill Yield 4.29% +1.0 basis point

• China Iron Ore Spot 103.3 USD/Metric Tonne +.9%
• Dutch TTF Nat Gas(European benchmark) 40.9 euros/megawatt-hour -.7%

• Citi US Economic Surprise Index -1.6 +3.0 points

• Citi Eurozone Economic Surprise Index 31.8 -.2 point

• Citi Emerging Markets Economic Surprise Index 8.3 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +8.4% +.2 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.08 +.10:  Growth Rate +13.0% +.1 percentage point, P/E 20.6 -.2
• S&P 500 Current Year Estimated Profit Margin 13.56% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 417.35 +.17: Growth Rate +20.7% +.1 percentage point, P/E 29.1 -.7
• Bloomberg US Financial Conditions Index .43 -2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.56 unch.
• US Yield Curve 32.75 basis points (2s/10s) +2.5 basis points
• US Atlanta Fed GDPNow Q1 Forecast -1.81% -5.0 basis points
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 32.5% unch.

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.47% unch.
• 10-Year TIPS Spread 2.37 +2.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 60.9% (+2.9 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 48.6%(+1.1 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -517 open in Japan 
• China A50 Futures: Indicating -1 open in China

• DAX Futures: Indicating +74 open in Germany

Portfolio:

• Lower: On losses in my tech/financial/industrial/consumer discretionary sector longs
• Disclosed Trades: None
• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -2.1%
  

Sector Underperformers:

• 1) Semis -3.9% 2) Alt Energy -3.2% 3) Construction -2.2%

Stocks Falling on Unusual Volume: 

• RPRX, JAZZ, SARO, RACE, TBBK, TSLA, TECK, CNTA, RBRK, NBIS, PONY, ROOT, COCO, VRT and BBNX

Stocks With Unusual Put Option Activity:

• 1) XLB 2) BBWI 3) GME 4) NU 5) BHC

Stocks With Most Negative News Mentions:

• 1) QUBT 2) APP 3) DTIL 4) SMTC 5) ESTC

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) XLC 3) GDX 4) KRE 5) XHB

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value unch.

Sector Outperformers:

• 1) Energy +1.1% 2) Foods +1.1% 3) Restaurants +.8%

Stocks Rising on Unusual Volume:

• WOR, GME, PRM, CYD, CTAS, WVE, PAYX, DLTR, PRAX, QFIN, ASH and MNSO

Stocks With Unusual Call Option Activity:

• 1) PLNT 2) XLB 3) XLI 4) BHC 5) DM

Stocks With Most Positive News Mentions:

• 1) GME 2) WOR 3) SURG 4) OSRH 5) CTAS

Sector ETFs With Most Positive Money Flow:

• 1) XLU 2) XLK 3) XLV 4) XRT 5) PPH

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:

• (SNX)/2.91
• (WGO)/.13
  

After the Close: 

• (AIR)/.96
• (AGX)/1.15
• (LULU)/5.85
• (OXM)/1.27
• (WBA)/.53
  

Economic Releases

8:30 am EST

• 4Q GDP Revisions.
• Advance Goods Trade Deficit for Feb. is estimated at -$138.0B versus -$153.3B in Jan.
• Wholesale Inventories MoM for Feb. is estimated to rise +.7% versus a +.8% gain in Jan.
• Retail Inventories MoM for Feb. is estimated to rise +.5% versus a -.1% decline in Jan.
• Initial Jobless Claims for last week is estimated to rise to 225K versus 223K prior.
• Continuing Claims is estimated to fall to 1885K versus 1892K prior.
  

10:00 am EST

• Pending Home Sales MoM for Feb. is estimated to rise +1.0% versus a -4.6% decline in Jan.
  

11:00 am EST

• Kansas City Fed Manufacturing Activity Index for March is estimated at -5 versus -5 in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Barkin speaking, 7Y T-Note auction, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, (CIEN) annual meeting and the (BROS) investor day 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 -10.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 19.8 +5.0
• 6 Sectors Declining, 5 Sectors Rising
• 36.8% of Issues Advancing, 61.1% Declining 
• TRIN/Arms .91 -25.4%
  
• Non-Block Money Flow -$84.7M
  
• 43 New 52-Week Highs, 36 New Lows
• 41.4% (-.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.7 -2.6

Other:

• Bloomberg Global Risk-On/Risk-Off Index 76.4 -1.4%
• Bloomberg Cyclicals/Defensives Index 242.0 -.9%
  
• Russell 1000: Growth/Value 19,719.0 -1.8%
• CNN Fear & Greed Index 29.0 (FEAR) unch.
• 1-Day Vix 11.8 -3.5%
  
• Vix 17.9 +4.1%
  
• Total Put/Call .87 +11.5%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 76.0 -.5 basis point.

• China Sovereign CDS 49.25 -.25 basis point.
  
• China Iron Ore Spot 102.1 USD/Metric Tonne +.5%

• Bloomberg Emerging Markets Currency Index 36.9 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 77.4 +.04%.
• Volatility Index(VIX) futures 18.1 -.59%.
• Euro Stoxx 50 futures +.18%

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.21%.  

Morning Preview Links

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