Friday Watch

Night Trading 

• Asian equity indices are -1.0% to unch. on average. 
• Asia Ex-Japan Investment Grade CDS Index 80.0 unch.
• China Sovereign CDS 47.75 -.5 basis point.
• China Iron Ore Spot 108.2 USD/Metric Tonne +.33%. 
• Crude Oil 95.48/bbl. -.25% 
• Gold 5,128.3 USD/t oz. +.04%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.76 -.07%.
• Bloomberg Emerging Markets Currency Index 35.58 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 96.2 -1.7%.
• US 10-Year Yield 4.26% unch.
• Japan 30-Year Yield 3.50% +1.0 basis point. 
• Volatility Index(VIX) futures 23.9 -2.1%.
• Euro Stoxx 50 futures +.24%. 
• S&P 500 futures +.42%.
• NASDAQ 100 futures +.36%.

Morning Preview Links

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

Stocks Falling into Final Hour on Protracted Mideast War Fears, Global Supply Chain Disruption Worries, Rising Inflation Expectations, Transport/Financial Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 59.6 +4.1%
• BofA Private Credit Proxy Index 71.2 -1.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 +2.0 basis points
• BofA Global Financial Stress Indicator .24 +2.0 basis points
• European Financial Sector CDS Index 66.9 +4.5%
• Emerging Market CDS Index 144.4 +4.2%
• Israel Sovereign CDS 81.2 +1.6% 
• Bloomberg Global Trade Policy Uncertainty Index .9 -.2

• Citi US Economic Surprise Index 32.0 +2.6

• Citi Eurozone Economic Surprise Index 9.70 unch.

• Citi Emerging Markets Economic Surprise Index 37.6 +.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) +13.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 325.13 +.20:  Growth Rate +17.1% +.1 percentage point, P/E 20.6 -.2
• S&P 500 Current Year Estimated Profit Margin 14.78% +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 525.10 +.39: Growth Rate +32.0% +.1 percentage point, P/E 28.4 -.1
• Bloomberg US Financial Conditions Index .33 +3.0 basis points
• US Yield Curve 50.25 basis points (2s/10s) -6.75 basis points 
• Bloomberg Industrial Metal Index 174.1 +.3%
• Dutch TTF Nat Gas(European benchmark) 50.9 euros/megawatt-hour +1.8% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.3% -.6 percentage point
• US Atlanta Fed GDPNow Q1 Forecast +2.7% +60.0 basis points
• US 10-Year T-Note Yield 4.26% +3.0 basis points
• 1-Year TIPS Spread 4.69 +23.0 basis points

• Highest target rate probability for April 29th FOMC meeting: 95.0% (+6.8 percentage points) chance of 3.5%-3.75%. Highest target rate probability for June 17th meeting: 77.8%(+15.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -680 open in Japan 
• China A50 Futures: Indicating -115 open in China

• DAX Futures: Indicating -5 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: Market Neutral

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.2%

Sector Underperformers:

• 1) Airlines -4.2% 2) Shipping -3.3% 3) Oil Service -3.0%

Stocks Falling on Unusual Volume: 

• XENE, FTK, IX, BWAY, BBW, PZZA, FICO, MAIN, BN, SAN, MCO, AAL, BX, BA, TEN, CPB, DHT, NVTS, BWLP, FTI, CMBT, UAL, SMFG, TSM, DG, ARES, DEO, RBRK, KKR, ALK, SYK, HLNE, BCH, BSAC, EVR, DNTH, LAZ, CIB, HMC, GFS, ISSC, ATI, CDRE, ARCB, AER, BCS, MELI, CGON, IPGP, CCL, FUTU, FWRD, LGND, FRO, INDV, DB, TRMD, PATH, CPA, NESR, WFRD, GPGI, ALOY, ALH, BETA, RELY, GRPN, KLAR, EMBJ, GIII, NVGS, KYIV, AAOI, FEIM, BW and AERO

Stocks With Unusual Put Option Activity:

• 1) DKS 2) GTLB 3) BIZD 4) SKM 5) LNG

Stocks With Most Negative News Mentions:

• 1) CRMT 2) NAVN 3) AWST 4) SMR 5) RR

Sector ETFs With Most Negative Money Flow:

• 1) KRE 2) XLF 3) XLK 4) IGV 5) XBI

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value -.8%

Sector Outperformers:

• 1) Utilities +2.0% 2) Coal +2.0% 3) Utilities +1.9%

Stocks Rising on Unusual Volume:

• HIMX, FLY, CE, CF, IPI, LXU, DSP, UMAC, MOS, BATL, MEOH, DOW, ASIX, LYB, NTR, DSGX, OLLI, IBTA, PARR, CVI, OXY, KR, LEU, ONDS, VELO, PSIX, PSX, XPEV, FMC, VG, PSNY, PUMP, AXTI, W and SSL

Stocks With Unusual Call Option Activity:

• 1) LWLG 2) RBRK 3) CORN 4) HIMX 5) BMBL 

Stocks With Most Positive News Mentions:

• 1) BMBL 2) MOS 3) ODD 4) GAMB 5) LWLG

Sector ETFs With Most Positive Money Flow:

• 1) PAVE 2) VDC 3) XLU 4) SHLD 5) XLP

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:

• (BKE)/1.51

After the Close: 

• None of note

Economic Release 

8:30 am EST

• Personal Income for Jan. is estimated to rise +.5% versus a +.3% gain in Dec.
• Personal Spending for Jan. is estimated to rise +.3% versus a +.4% gain in Dec.
• The Core PCE Price Index MoM for Jan. is estimated to rise +.4% versus a +.4% gain in Dec.
• Durable Goods Orders for Jan. is estimated to rise +1.1% versus a -1.4% decline in Dec.
• Durables Ex Transports for Jan. is estimated to rise +.5% versus a +1.0% gain in Dec.
• Cap Goods Orders Non-Defense Ex Air for Jan. is estimated to rise +.5% versus a +.8% gain in Dec.
• 4Q GDP readings updated. 

10:00 am EST

• Univ. of Mich. Consumer Sentiment Index for March is estimated to fall to 54.6 versus 56.6 in February. 
• Univ. of Mich. 1Y Inflation Expectations Index for March is estimated to rise +3.7% versus a prior estimate of a +3.4% gain. 
• JOLTS Job Openings for Jan. is estimated to rise to 6750K versus 6542K in Dec. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Atlanta Fed GDPNow Q1 update, Dallas Fed PCE for Jan., weekly US Baker Hughes rig count, weekly CFTC speculative net positioning reports, (HEI) annual meeting 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 +16.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.0 -2.3
• 9 Sectors Declining, 2 Sectors Rising
• 26.4% of Issues Advancing, 71.7% Declining 
• TRIN/Arms .69 -22.5%
• Non-Block Money Flow -$319.9M
  
• 47 New 52-Week Highs, 82 New Lows
• 51.3% (-4.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 32.2 -3.8

Polymarket: 

• How long will the DHS shutdown last? 60+ days 46.0% +3.0 percentage points
• 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 41.0% -8.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 98.1 -.7%
• Global Monitor Iran Instability Index 98.0 -2.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 95.0% unch.
• US High-Yield Tech Sector OAS Index 531.75 +5.75 basis points
• Bloomberg Cyclicals/Defensives Index 245.0 -1.6%
• Morgan Stanley Growth vs Value Index 140.4 -1.3%
• CNN Fear & Greed Index 23.0 (Moved to EXTREME FEAR from FEAR) -4.0
• 1-Day Vix 17.3 -8.9%
  
• Vix 26.6 +9.7%
  
• Total Put/Call 1.04 +10.6%