Wednesday Watch

Night Trading 

• Asian equity indices are +.5% to +3.0% on average. 
• Asia Ex-Japan Investment Grade CDS Index 74.5 -1.75 basis points.
• China Sovereign CDS 44.75 -.25 basis point.
• China Iron Ore Spot 104.2 USD/Metric Tonne +.5%. 
• Crude Oil 83.68/bbl. +.3% 
• Gold 5,208.8 USD/t oz. -.7%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.83 -.1%.
• Bloomberg Emerging Markets Currency Index 35.84 unch.
• Bloomberg Global Risk-On/Risk Off Index 97.6 +.3%.
• US 10-Year Yield 4.14% -1.0 basis points.
• Japan 30-Year Yield 3.45% +1.0 basis point. 
• Volatility Index(VIX) futures 23.54 -1.6%.
• Euro Stoxx 50 futures -.14%. 
• S&P 500 futures +.43%.
• NASDAQ 100 futures +.43%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and transport shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 50% net long heading into the day.

Stocks Reversing Slightly Lower into Final Hour on Higher Long-Term Rates, Oil Shock Fears, Supply Chain Disruption Worries, Healthcare/Defense Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 55.0 -.6%
• BofA Private Credit Proxy Index 72.7 +.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .24 -2.0 basis points
• BofA Global Financial Stress Indicator .31 +2.0 basis points
• European Financial Sector CDS Index 61.1 -6.5%
• Emerging Market CDS Index 137.2 -1.7%
• Israel Sovereign CDS 77.0 -19.6% 
• Bloomberg Global Trade Policy Uncertainty Index 1.2 unch.

• Citi US Economic Surprise Index 29.4 +.8 point

• Citi Eurozone Economic Surprise Index 9.70 unch.

• Citi Emerging Markets Economic Surprise Index 37.0 +.2 point
• S&P 500 Current Quarter EPS Growth Rate YoY(494 of 500 reporting) +13.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 324.58 +.27:  Growth Rate +16.9% +.1 percentage point, P/E 21.0 +.2
• S&P 500 Current Year Estimated Profit Margin 14.77% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +28.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 524.09 +.71: Growth Rate +31.7% +.2 percentage point, P/E 28.8 +.3
• Bloomberg US Financial Conditions Index .14 +4.0 basis points
• US Yield Curve 56.0 basis points (2s/10s) +1.75 basis points 
• Bloomberg Industrial Metal Index 173.61 +1.0% 
• Dutch TTF Nat Gas(European benchmark) 47.4 euros/megawatt-hour -16.0% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.5% +2.2 percentage points
• US Atlanta Fed GDPNow Q1 Forecast +2.1% unch.
• US 10-Year T-Note Yield 4.14% +4.0 basis points
• 1-Year TIPS Spread 4.26 -8.0 basis points

• Highest target rate probability for April 29th FOMC meeting: 85.1% (-3.1 percentage points) chance of 3.5%-3.75%. Highest target rate probability for June 17th meeting: 59.3%(-3.9 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +722 open in Japan 
• China A50 Futures: Indicating -26 open in China

• DAX Futures: Indicating +81 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.7%

Sector Underperformers:

• 1) Software -2.4% 2) Computer Services -1.8% 3) Healthcare Providers -1.5%

Stocks Falling on Unusual Volume: 

• LXU, TLK, BBSI, CDRE, FLGT, CBOE, OXY, ABM, HHH, UNFI, MEOH, IPGP, BETA, WD, YETI, VIA, PSKY, CRSP, CNC and BNTX

Stocks With Unusual Put Option Activity:

• 1) BAX 2) CNC 3) CVE 4) VFC 5) TECH

Stocks With Most Negative News Mentions:

• 1) CNC 2) BNTX 3) NAVN 4) SNOW 5) BBWI

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) XLF 3) XLP 4) XLI 5) XLC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.3%

Sector Outperformers:

• 1) Alt Energy +2.7% 2) Gold & Silver +2.1% 3) Networking +1.8%

Stocks Rising on Unusual Volume:

• AXTI, ZVRA, FIGR, VNET, UAMY, BBIO, UMAC, AAOI, MLYS, CEPU, MAZE, CAPR, ALOY, UEC, TSSI, VRTX, SEDG, DYN, OUST, LITE, BW, GDS, FUTU, LASR, VERA, VOYG, RCAT, ABX, CRCL, SNDK, GLW, LFUS, RIVN, PTRN, BIOA, LFUS, PTRN, ISSSC, ZYME, RIVN, RYAM, COHR, GGAL, LOMA, AEHR, KALV, CECO, EGO, LTM, VICR, VIAV, INFQ, RUN, CELH, TGS, OCS, CWEN/A, ELF, FSLY, PBF, RRX, CASY, BABA, SNDX, DFTX, EMBJ, GNK, FSS, AEO, ADEA, CRESY, VRT, BIDU, DFTX, HIMS, SAN and BILI

Stocks With Unusual Call Option Activity:

• 1) HIMX 2) BRBR 3) CGNX 4) SAVA 5) ASHS 

Stocks With Most Positive News Mentions:

• 1) INKT 2) NIO 3) ZVRA 4) STGW 5) BBIO

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) KRE 3) XBI 4) PBPH 5) PBOG

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:

• (CPB)/.57 

After the Close: 

• (DSGX)/.49
• (WOOF)/.02
• (SFIX)/-.05 

Economic Release 

8:30 am EST

• The CPI MoM for Feb. is estimated to rise +.3% versus a +.2% gain in Jan. 
• The Core CPI MoM for Feb. is estimated to rise +.2% versus a +.3% gain in Jan.
• Real Avg. Weekly Earnings YoY for Feb. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,642,500 barrels versus a +3,475,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -2,281,750 barrels versus a -1,704,000 barrel decline the prior week. Distillate inventories are estimated to fall by -16,250 barrels versus a +429,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.01% versus a +.6% gain prior. 

2:00 pm EST

• The Federal Budget Balance for Feb. is estimated at -$309.5B versus -$94.6B in Jan. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bowman speaking, 10Y T-Note auction, OPEC monthly report, weekly MBA Mortgage Applications report, Thomson Retuters IPSOS PCSI for March, UBS Consumer Conference, BofA Information/Business Services Conference, Cantor Fitzgerald Tech/Industrial Growth Conference, RBC Financial Institutions Conference, Wolfe FinTech Conference, (TEL) annual meeting, (ADI) annual meeting, (AMAT) annual meeting and the BNP Paribas Consumer Staples/Ingredients 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 +4.9% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.7 +1.0
• 3 Sectors Declining, 8 Sectors Rising
• 65.5% of Issues Advancing, 32.3% Declining 
• TRIN/Arms 1.02 +39.7%
• Non-Block Money Flow -$30.6M
  
• 27 New 52-Week Highs, 35 New Lows
• 57.1% (+1.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.0 +11.3

Polymarket: 

• How long will the DHS shutdown last? 30+ days 97.0% -1.0 percentage point
• Will China invade Taiwan by end of 2026? 10.0% -1.0 percentage point
• Trump announces end of military operations against Iran by March 31st 47.0% +15.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 98.3 +2.0%
• Global Monitor Iran Instability Index 95.0 -5.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 95.0% +2.0 percentage points
• US High-Yield Tech Sector OAS Index 531.5 -24.0 basis points
• Bloomberg Cyclicals/Defensives Index 247.0 +.03%
• Morgan Stanley Growth vs Value Index 142.6 +.2%
• CNN Fear & Greed Index 31.0 (Moved to FEAR from EXTREME FEAR) +8.0
• 1-Day Vix 15.1 -33.5%
  
• Vix 22.9 -10.4%
  
• Total Put/Call .92 -1.1%