Stocks Slightly Higher into Final Hour on US Economic Data, Short-Covering, Technical Buying, Telecom/Medical Sector Strength

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) 18.6 +1.3%
• S&P 500 Intraday % Swing 1.1 -2.3%
• Bloomberg Global Risk On/Risk Off Index 76.1 -.3%

• Euro/Yen Carry Return Index 182.7 +.74%

• Emerging Markets Currency Volatility(VXY) 8.5 +1.3%

• CBOE S&P 500 Implied Correlation Index 22.2 +2.4% 

• ISE Sentiment Index 127.0 -5.0 points
  

• Total Put/Call .94 -2.1%

• NYSE Arms 1.07 +57.4%
• NYSE Non-Block Money Flow -$202.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 59.0 +1.7%
  

• US Energy High-Yield OAS 359.0 +1.3%
• Bloomberg TRACE # Distressed Bonds Traded 213.0 +8.0

• European Financial Sector CDS Index 65.8 +3.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 146.9 +2.7%
  

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

• Asia Ex-Japan Investment Grade CDS Index 78.0 +2.1%
  

• Emerging Market CDS Index 180.7 +.4%
• Israel Sovereign CDS 87.9 -.02%
  

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

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

• 3M T-Bill Treasury Repo Spread -4.75 basis points -2.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap .5 -.25 basis point
• MBS  5/10 Treasury Spread 140.0 +1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 602.0 +1.0 basis point
• Avg. Auto ABS OAS 58.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.8 -.07%
• 3-Month T-Bill Yield 4.29% unch.

• China Iron Ore Spot 103.0 USD/Metric Tonne -.5%
• Dutch TTF Nat Gas(European benchmark) 41.2 euros/megawatt-hour +.8%

• Citi US Economic Surprise Index -.7 +.9 point

• Citi Eurozone Economic Surprise Index 33.7 +1.9 points

• Citi Emerging Markets Economic Surprise Index 7.5 -.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +8.4% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.11 +.03:  Growth Rate +13.0% unch., P/E 20.5 -.1
• S&P 500 Current Year Estimated Profit Margin 13.56% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 417.56 +.21: Growth Rate +20.7% unch., P/E 28.8 -.3
• Bloomberg US Financial Conditions Index .34 -9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.52 -4.0 basis points
• US Yield Curve 36.75 basis points (2s/10s) +4.0 basis points
• US Atlanta Fed GDPNow Q1 Forecast -1.81% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 33.8% +1.3 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.47% unch.
• 10-Year TIPS Spread 2.40 +3.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 55.7% (-5.2 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 47.5%(-1.1 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -280 open in Japan 
• China A50 Futures: Indicating +36 open in China

• DAX Futures: Indicating +211 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/utility sector longs and index hedges
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.9%
  

Sector Underperformers:

• 1) Semis -2.2% 2) Networking -1.8% 3) I-Banking -1.6%

Stocks Falling on Unusual Volume: 

• PAG, AXTA, CIEN, SN, COCO, THRM, ACVA, APP, CARG, APTV, PPG, ZK, PRIM, BLCO, QURE, VRT, CRDO, VC, SOFI, CAPR, MGA, GM, DAN, LEA, PONY, KD, JEF, ADNT, VRNT, SNX and GME

Stocks With Unusual Put Option Activity:

• 1) AMKR 2) GME 3) ME 4) HES 5) KD

Stocks With Most Negative News Mentions:

• 1) GME 2) JEF 3) GM 4) TRUE 5) KD

Sector ETFs With Most Negative Money Flow:

• 1) SMH 2) ARKK 3) XLV 4) FXD 5) XLB

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.3%

Sector Outperformers:

• 1) Gold & Silver +1.2% 2) Telecom +.9% 3) Agriculture +.7%

Stocks Rising on Unusual Volume:

• SLNO, CNXC, CAR, PHH, RXST, DLTR, MLKN, MTSR, AAP, WGO, ZLAB, CLMT, WNC, RIVN, LX, ALC, FINV, PRM, ONC, SCS, SA, MNSO, GCT, LBRT, BILI, ANF, FUL, DAR, WING, DIN, QFIN, SE, BWIN, CAVA, AVO, PARR and CBRL

Stocks With Unusual Call Option Activity:

• 1) WOOF 2) CAR 3) SAND 4) ME 5) PRMW

Stocks With Most Positive News Mentions:

• 1) SLNO 2) CNXC 3) HTZ 4) CAR 5) MLKN

Sector ETFs With Most Positive Money Flow:

• 1) PPA 2) FXU 3) XLP 4) XLK 5) XLF

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:

• None of note

After the Close: 

• None of note

Economic Releases

8:30 am EST

• Personal Income for Feb. is estimated to rise +.4% versus a +.9% gain in Jan.
• Personal Spending for Feb. is estimated to rise +.5% versus a -.2% decline in Jan.
• The PCE Core Price Index MoM for Feb. is estimated to rise +.3% versus a +.3% gain in Jan.
  

10:00 am EST

• Final Univ. of Mich. Sentiment readings for March.
  

11:00 am EST

• The Kansas City Fed Services Activity Index for March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Barr speaking, Fed's Bostic speaking, Atlanta Fed GDPNow Q1 update, Bloomberg March US Economic Survey, Dallas Fed PCE for Feb., weekly CFTC speculative net positioning reports and the weekly US Baker Hughes oil rig count 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 -3.4% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 19.8 +5.0
• 2 Sectors Declining, 9 Sectors Rising
• 52.4% of Issues Advancing, 45.1% Declining 
• TRIN/Arms 1.35 +98.5%
  
• Non-Block Money Flow -$54.7M
  
• 27 New 52-Week Highs, 48 New Lows
• 40.8% (-.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.7 unch.

Other:

• Bloomberg Global Risk-On/Risk-Off Index 76.4 +.1%
• Bloomberg Cyclicals/Defensives Index 239.6 -.3%
  
• Russell 1000: Growth/Value 19,649.7 -.02%
• CNN Fear & Greed Index 29.0 (FEAR) unch.
• 1-Day Vix 13.4 -16.7%
  
• Vix 18.3 -.3%
  
• Total Put/Call .91 -5.2%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 76.75 +.75 basis point.

• China Sovereign CDS 49.5 +.25 basis point.
  
• China Iron Ore Spot 103.3 USD/Metric Tonne +.9%

• Bloomberg Emerging Markets Currency Index 36.9 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 65.8 -13.7%.
• Volatility Index(VIX) futures 19.1 +1.1%.
• Euro Stoxx 50 futures -.52%

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.20%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by tech and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.