Tuesday Watch

Night Trading 

• Asian equity indices are -1.0% to +1.0% on average. 
• Asia Ex-Japan Investment Grade CDS Index 66.75 -.25 basis point.
• China Sovereign CDS 42.75 -.5 basis point.
• China Iron Ore Spot 96.1 USD/Metric Tonne +.3%. 
• Gold 5,196.2 USD/t oz. -.56%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.89 +.01%.
• Bloomberg Emerging Markets Currency Index 36.2 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 97.9 +.5%.
• US 10-Year Yield 4.04% +1.0 basis point.
• Japan 30-Year Yield 3.32% -2.0 basis points. 
• Volatility Index(VIX) futures 21.1 +.01%.
• Euro Stoxx 50 futures +.11%. 
• S&P 500 futures +.13%.
• NASDAQ 100 futures +.21%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modesty 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 US Global Tariff Uncertainty, AI Industry Disruption Worries, Crypto Plunge, Tech/Financial Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 52.6 +2.3%
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .22 +3.0 basis points
• BofA Global Financial Stress Indicator -.04 +8.0 basis points
• European Financial Sector CDS Index 54.8 -1.3%
• Emerging Market CDS Index 128.7 +1.0%
• Bloomberg Global Trade Policy Uncertainty Index 2.1 +.6

• Citi US Economic Surprise Index 27.4 +1.7 points

• Citi Eurozone Economic Surprise Index 33.3 +.2 point

• Citi Emerging Markets Economic Surprise Index 31.1 +2.6 points
• S&P 500 Current Quarter EPS Growth Rate YoY(427 of 500 reporting) +12.4% +.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 320.27 +.78:  Growth Rate +19.0% +.3 percentage point, P/E 21.4 -.2
• S&P 500 Current Year Estimated Profit Margin 12.49% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +19.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 507.37 +1.70: Growth Rate +23.5% +.4 percentage point, P/E 27.9 -.5
• Bloomberg US Financial Conditions Index .65 +3.0 basis points
• US Yield Curve 58.75 basis points (2s/10s) -1.75 basis points 
• Bloomberg Industrial Metal Index 167.8 -.7% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 30.2% -.3 percentage point
• US Atlanta Fed GDPNow Q1 Forecast +3.1% +10.0 basis points
• US 10-Year T-Note Yield 4.03% -6.0 basis points
• 1-Year TIPS Spread 3.58 +1.0 basis point

• Highest target rate probability for April 29th FOMC meeting: 82.1% (-.4 percentage point) chance of 3.5%-3.75%. Highest target rate probability for June 17th meeting: 46.7%(+1.1 percentage points) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -55 open in Japan 
• China A50 Futures: Indicating +118 open in China

• DAX Futures: Indicating +42 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/industrial/transport/consumer discretionary sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -2.4%

Sector Underperformers:

• 1) Computer Services -10.1% 2) Software -5.2% 3) Regional Banks -4.7%

Stocks Falling on Unusual Volume: 

• APO, XYZ, BN, SOFI, VNET, MATV, FSLY, BKNG, WK, BX, HLNE, FROG, HRB, EPAM, ARES, QLYS, SAH, FIG, PAY, INMD, EXPE, DASH, HRMY, AXP, DOCN, LMND, MNDY, LNC, AGYS, KKR, DNOW, ROOT, TEAM, PGY, SNOW, BL, GTLB, NET, KVYO, STEP, IBM, ZS, AERO, CRWD, TNET, DDOG, TENB, TREE, RNG, GRAL and NVO

Stocks With Unusual Put Option Activity:

• 1) FND 2) OKTA 3) COMP 4) JEPQ 5) CWAN

Stocks With Most Negative News Mentions:

• 1) APP 2) CRWD 3) AXP 4) AEO 5) VFC

Sector ETFs With Most Negative Money Flow:

• 1) KRE 2) SOXX 3) XBI 4) GDX 5) VHT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.9%

Sector Outperformers:

• 1) Gold & Silver +2.5% 2) Coal +1.1% 3) Pharma +1.0%

Stocks Rising on Unusual Volume:

• ACLX, EHAB, TNDM, VRE, VKTX, LINC, FSM, AMN, SCZM, LEGN, STOK, CC, CLDX, AUGO, NESR, AU, SFM, OII, AMPX, KGC, PYPL, OIS, WGS, SVM, HBM, INVX, MD, ICLR, CTGO, SNDK, PSLV, DPZ, TDW, HMY, TPL, TGTX, GLW, USAU, PZZA, TARS, IRON, AAOI, HSTM, PVLA, GSHD, AEHR, VICR, RYI and TNGX

Stocks With Unusual Call Option Activity:

• 1) VNDA 2) GRAL 3) REAL 4) PRMW 5) PRGS 

Stocks With Most Positive News Mentions:

• 1) ACLX 2) VNDA 3) OII 4) SPAI 5) PYPL

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) IYZ 3) PBPH 4) FDN 5) GRID

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:

• (AS)/.28
• (AMT)/2.54
• (CIFR)/-.10
• (ELAN)/.11
• (EXPD)/1.47
• (HD)/2.53
• (KDP)/.59
• (LTH)/.28
• (NRG)/.98
• (PLNT)/.79
• (RGEN)/.44
• (XMTR)/.12 
• (CEG)/2.26
• (DDS)/10.71
• (EOG)/2.20
• (MELI)/11.50 

After the Close: 

• (AXON)/1.60
• (SAM)/-2.57
• (CAVA)/.03
• (FSLR)/5.14
• (GDDY)/1.58
• (HPQ)/.77
• (JAZZ)/6.52
• (MOS)/.51
• (RRC)/.71
• (SPXC)/1.87
• (TREX)/-.02
• (WDAY)/2.32 

Economic Release 

8:30 am EST

• Philly Fed Non-Manufacturing Activity Index for Feb. 

9:00 am EST

• The FHFA House Price Index MoM for Dec. is estimated to rise +.3% versus a +.6% gain in Nov. 
• House Price Purchase Index QoQ for 4Q. 
• The S&P Cotalithy CS 20-City MoM SA for Dec. is estimated to rise +.3% versus a +.47% gain in Nov. 

10:00 am EST

• The Richmond Fed Manufacturing Index for Feb. is estimated to fall to -8.0 versus -6.0 in Jan.
• The Conference Board Consumer Confidence Index for Feb. is estimated to rise to 87.0 versus 84.5 in Jan.
• Wholesale Trade Sales MoM for Dec. 

10:30 am EST

• The Dallas Fed Services Activity Index for Feb. 

Upcoming Splits

• (SF) 3-for-2

Other Potential Market Movers

• The Fed's Cook speaking, Fed's Waller speaking, Fed's Bostic speaking, Fed's Goolsbee speaking, State of the Unions Address, 2Y T-Note auction, ADP weekly Employment Change, weekly US retail sales reports, (AAPL) annual meeting, (TXN) business update call and the BMO Metals/Mining/Critical Minerals 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 +13.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.0 +1.6
• 6 Sectors Declining, 5 Sectors Rising
• 21.6% of Issues Advancing, 76.1% Declining 
• TRIN/Arms 1.0 -19.4%
• Non-Block Money Flow -$283.3M
  
• 156 New 52-Week Highs, 94 New Lows
• 65.8% (-4.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.3 -3.9

Polymarket:

• How long will the DHS shutdown last? 30+ days 55.0% -2.0 percentage points
• Will China invade Taiwan by end of 2026? 10.0% -1.0 percentage point
• US strikes Iran by March 15th 50.0% +2.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 97.2 -3.0%
• US High-Yield Tech Sector OAS Index 531.75 +17.75 basis points
• Bloomberg Cyclicals/Defensives Index 246.2 -2.4%
• Morgan Stanley Growth vs Value Index 134.5 -.6%
• CNN Fear & Greed Index 35.0 (FEAR) -7.0
• 1-Day Vix 14.5 -18.3%
  
• Vix 21.6 +12.9%
  
• Total Put/Call .87 -3.3%