Stocks Lower into Afternoon on Surging Energy Prices, Rising Credit Angst, Technical Selling, Transport/Financial Sector Weakness

Overseas Futures:

• Nikkei 225 Futures: Indicating -1,360 open in Japan 
• China A50 Futures: Indicating -166 open in China

• DAX Futures: Indicating +48 open in Germany

Portfolio:

• Slightly Lower: On losses in my transport/biotech/tech/industrial/consumer discretionary sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges 
• Market Exposure: Moved to 25% Net Long

Monday's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (KFY)/1.24

After the Close: 

• (CASY)/2.99
• (HPE)/.59
• (MTN)/6.17 

Economic Release 

11:00 am EST

• NY Fed 1Yr Inflation Expectations Index for Feb. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The CB Employment Trends Index for Feb., DB Internet/Telecom Conference, Barclays Healthcare Conference, BNP Paribas Tech/Media/Telecom Conference, Loop CapitalStifel NYC Tech Conference, Jefferies Biotech on the Beach Summit, BofA Consumer/Retail Conference, Leerink Healthcare Conference, (SANM) annual meeting and the Cantor Tech/Industrial Growth Conference could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Friday Watch

Night Trading 

• Asian equity indices are -1.25% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 72.0 +.5 basis point.
• China Sovereign CDS 44.5 -.25 basis point.
• China Iron Ore Spot 101.0 USD/Metric Tonne +1.0%. 
• Gold 5,149.4 USD/t oz. +1.4%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.85 +.08%.
• Bloomberg Emerging Markets Currency Index 35.70 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 99.43 -1.7%.
• US 10-Year Yield 4.13% unch.
• Japan 30-Year Yield 3.40% +1.0 basis point. 
• Volatility Index(VIX) futures 22.3 -.8%.
• Euro Stoxx 50 futures +.57%. 
• S&P 500 futures +.06%.
• NASDAQ 100 futures +.04%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and transport 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 Falling into Final Hour on Long-Term Rate Rise, Economy/Earnings Outlook Jitters, Oil Surge, Transport/Metals & Mining Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 56.4 +4.7%
• BofA Private Credit Proxy Index 74.0 -.6% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .25 unch.
• BofA Global Financial Stress Indicator .15 unch.
• European Financial Sector CDS Index 61.7 +3.8%
• Emerging Market CDS Index 138.3 +3.0%
• Israel Sovereign CDS 80.1 -3.3% 
• Bloomberg Global Trade Policy Uncertainty Index 1.4 -.3

• Citi US Economic Surprise Index 39.3 +.3 point

• Citi Eurozone Economic Surprise Index 25.9 -.4 point

• Citi Emerging Markets Economic Surprise Index 37.3 -.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(491 of 500 reporting) +13.6% +.5 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 322.79 +.18:  Growth Rate +16.3% +.1 percentage point, P/E 21.2 -.1
• S&P 500 Current Year Estimated Profit Margin 14.75% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +28.1% +.1 percentage point
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 514.79 +.52: Growth Rate +29.4% +.1 percentage point, P/E 29.2 +.3
• Bloomberg US Financial Conditions Index .49 +15.0 basis points
• US Yield Curve 54.5 basis points (2s/10s) -2.5 basis points 
• Bloomberg Industrial Metal Index 169.0 -1.8% 
• Dutch TTF Nat Gas(European benchmark) 50.7 euros/megawatt-hour +4.0% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 27.6% -2.2 percentage points
• US Atlanta Fed GDPNow Q1 Forecast +3.0% unch.
• US 10-Year T-Note Yield 4.14% +5.0 basis points
• 1-Year TIPS Spread 4.25 +21.0 basis points

• Highest target rate probability for April 29th FOMC meeting: 87.3% (-.9 percentage point) chance of 3.5%-3.75%. Highest target rate probability for June 17th meeting: 67.7%(+.9 percentage point) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +2,400 open in Japan 
• China A50 Futures: Indicating +37 open in China

• DAX Futures: Indicating +80 open in Germany

Portfolio:

• Slightly Lower: On losses in my transport/biotech/industrial/consumer discretionary sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and emerging market shorts
• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.6%

Sector Underperformers:

• 1) Airlines -6.4% 2) Gold & Silver -6.0% 3) Nuclear -5.0%

Stocks Falling on Unusual Volume: 

• NVS, GIL, TGS, EVTC, SAN, TEN, AVTX, AME, TYRA, HMC, GSL, SHC, SNN, EYE, FRO, ALM, BCS, TGLS, LFUS, TPB, NPCE, APAM, PAGS, IX, ECO, EE, DAL, CPA, OUST, AER, BC, AEM, BILI, TRDA, SHG, BWLP, TRMD, AAL, EMBJ, DY, HROW, UAL, SKM, SSRM, COHR, PSIX, ALK, LASR, BLLN, ORN, XNCR, EYPT, ALOY, AEO, CIEN and VSCO

Stocks With Unusual Put Option Activity:

• 1) EMB 2) BURL 3) HTZ 4) AR 5) JETS

Stocks With Most Negative News Mentions:

• 1) ALT 2) RGNX 3) PLUG 4) FRMI 5) PMI

Sector ETFs With Most Negative Money Flow:

• 1) FON 2) XLI 3) XLE 4) VGT 5) GDXJ

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -1.0%

Sector Outperformers:

• 1) Computer Services +2.9% 2) Software +1.6% 3) Cyber Security +1.1%

Stocks Rising on Unusual Volume:

• BATL, SOC, TNGX, TTD, UNF, AMPX, QURE, RTO, VG, LXU, EXPE, OOMA, WLY, REPX, AESI, OKTA, WIX, MYE, DSP, CRDO, NPT, EC, FWRG, BKNG, MDB, ATHM, CLBT, BW, TEAM, KVYO, LYB, SE, CE, BESO, INTU, NOW, MEOH, INTA, BURL, CF, WPP, HUN, DUOL, DT, DOW, CHRD, CRM, KR, DSGX, ASIX, OLN, ALAB, DV, GDDY, EPAM, APA, OSPN, HNRG, DASH, TRI, CRWD, AR, PATH, CHYM, TRIP and DAKT

Stocks With Unusual Call Option Activity:

• 1) BWA 2) HTZ 3) PDYN 4) WEAT 5) QSR 

Stocks With Most Positive News Mentions:

• 1) TTD 2) BKNG 3) UNF 4) KR 5) AVGO

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLK 3) XLY 4) VDE 5) IGV

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume