Stocks Higher into Final Hour on Mid-East War De-Escalation Hopes, Decelerating Inflation Expectations, Technical Buying, Tech/Defense Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 61.0 -3.2%
• BofA Private Credit Proxy Index 70.2 -1.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 -1.0 basis point
• BofA Global Financial Stress Indicator .42 -6.0 basis points
• European Financial Sector CDS Index 71.8 -7.7%
• Emerging Market CDS Index 187.5 -3.2%
• Israel Sovereign CDS 76.3 -7.0% 
• Bloomberg Global Trade Policy Uncertainty Index .6 -.1
• US Morning Consult Daily Consume Sentiment Index 89.6 +.6

• Citi US Economic Surprise Index 24.6 +4.1

• Citi Eurozone Economic Surprise Index -5.2 -1.5

• Citi Emerging Markets Economic Surprise Index 45.4 +3.2 
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +85.6% -8.8 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 335.80 +.21:  Growth Rate +20.9% -.1 percentage point, P/E 19.7 +.6
• S&P 500 Current Year Estimated Profit Margin 15.07% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +690.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 794.40 +3.50: Growth Rate +99.7% +.9 percentage point, P/E 17.8 +.7 
• Bloomberg US Financial Conditions Index .26 +45.0 basis points
• US Yield Curve 52.0 basis points (2s/10s) +1.25 basis points
• Bloomberg Industrial Metal Index 171.4 +1.2%
• Dutch TTF Nat Gas(European benchmark) 47.5 euros/megawatt-hour -6.4% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 19.8% +.7 percentage point
• US Atlanta Fed GDPNow Q1 Forecast +1.9% -.1 percentage point
• US 10-Year T-Note Yield 4.30% -5.0 basis points
• 1-Year TIPS Spread 5.09 -12.0 basis points

• Highest target rate probability for June 17th FOMC meeting: 93.7% (+.2 percentage point) chance of 3.5%-3.75%. Highest target rate probability for July 29th meeting: 90.8%(+3.2 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +430 open in Japan 
• China A50 Futures: Indicating -66 open in China

• DAX Futures: Indicating +134 open in Germany

Portfolio:

• Higher: On gains in my biotech/tech/industrial/consumer discretionary sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.5%

Sector Underperformers:

• 1) Energy -3.6% 2) Oil Service -2.0% 3) Software -.6%

Stocks Falling on Unusual Volume: 

• APA, LNG, E, MRX, VLO, MICC, DOW, BSM, DEC, EC, FIS, PBR, DVN, INR, PR, FANG, KYN, BKV, YPF, VIPS, EQNR, OXY, CVX, XOM, CNQ, DLO, PM, VITL, CLMT, AORT, ARE, LYB, WING, TALO, KNTK, SM, VG, VET, SD, SSL, EYE, LW, VIST, NBR, COGT, MLTX, APTV, NKE, AXTI, TPB and RH

Stocks With Unusual Put Option Activity:

• 1) EWG 2) IE 3) VIST 4) SVC 5) WEAT

Stocks With Most Negative News Mentions:

• 1) NKE 2) RH 3) FTLF 4) IBRX 5) BYND

Sector ETFs With Most Negative Money Flow:

• 1) SOXX 2) XLI 3) XLY 4) XLU 5) PTF

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.7%

Sector Outperformers:

• 1) Disk Drives +5.8% 2) Gold & Silver +5.1% 3) AI/Innovation +4.2%

Stocks Rising on Unusual Volume:

• RGC, TH, PLAY, OMER, NCNO, KOD, BKSY, AVTX, CAR, WDC, PVH, SNDK, PSIX, LITE, FSLY, MU, JBIO, CSTM, PL, SSRM, INTC, AEHR, SNX, IPX, SA, ISSC, AEHR, MRVL, AUGO, GFI, CENX, AA, GPCR, KALU, SLNO, HSAI, ORLA, LUNR, AU, UNIT, EMBJ, SXT, PAGS, WWD, TSEM, HMY, BLLN, TSSI, CDE, NKTR, FSM, LLY, BLD, IESC, FLY, SMFG, BA, GLW, LE, CPA, ARVN, ESE, EH, NWG, DSGN, TDS, CALM, IRDM, BLCO, ATEC, AMD, HSBC, UAL, ANRO, MDA, RKLB, SHC, MESO, FUTU and BCS

Stocks With Unusual Call Option Activity:

• 1) PRMB 2) UNIT 3) VLY 4) OMER 5) ETHE 

Stocks With Most Positive News Mentions:

• 1) TH 2) LFWY 3) GNS 4) WDC 5) KOD

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) SMH 3) IGV 4) XBI 5) BAI

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:

• (AYI)/4.00
• (LNN)/1.70 

After the Close: 

• (APOG)/.88

Economic Releases 

7:30 am EST

• Challenger Job Cuts YoY for March. 

8:30 am EST 

• The Trade Deficit for Feb. is estimated at -$60.9B versus -$54.5B in Jan.
• Imports MoM for Feb. is estimated to fall -.2% versus a -.7% decline in Jan.
• Exports MoM for Feb. is estimated to fall -2.3% versus a +5.5% gain in Jan.
• Initial Jobless Claims for last week is estimated to rise to 212K versus 210K the prior week.
• Continuing Claims is estimated to rise to 1836K versus 1819K prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Logan speaking, Fed's Bowman speaking, Atlanta Fed GDP Now Q1 update, Fed's weekly balance sheet report, weekly US Baker Hughes oil rig count, weekly EIA natural gas inventory report and  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 +14.8% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.3 -1.4
• 9 Sectors Rising, 2 Sectors Declining
• 72.3% of Issues Advancing, 26.1% Declining 
• TRIN/Arms 1.58 +61.2%
• Non-Block Money Flow +$127.2M
  
• 24 New 52-Week Highs, 35 New Lows
• 48.6% (+3.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.3 +8.9

Polymarket: 

• How long will the DHS shutdown last? 60+ days 89.0% +2.0 percentage points
• Will China invade Taiwan by end of 2026? 10.0% unch.
• US forces enter Iran by April 30th 56.0% -4.0 percentage points
• Trump announces end of military operations against Iran by April 30th 54.0% +10.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 102.1 +.7%
• Global Monitor Iran Instability Index 100.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 95.0% unch.
• US High-Yield Tech Sector OAS Index 534.0 -17.75 basis points
• Bloomberg Cyclicals/Defensives Index 252.3 +1.2%
• Morgan Stanley Growth vs Value Index 135.9 +1.4%
• CNN Fear & Greed Index 16.0 (EXTREME FEAR) +3.0
• 1-Day Vix 15.4 -18.4%
  
• Vix 23.9 -5.2%
  
• Total Put/Call 1.0 +2.0%

Wednesday Watch

Around X:

• @Business  

• President Donald Trump says he expects the US to end the war on Iran within two to three weeks, suggesting the US had largely accomplished its military goals and would leave it to other nations to resolve issues with the Strait of Hormuz. 
• Manufacturing across much of Asia expanded in March, with activity improving in South Korea, Malaysia and Thailand, even as other economies saw the impact of energy supply disruptions from the US-Israeli war on Iran. 
• Every week that passes without a face-to-face meeting between Donald Trump and Xi Jinping gives fresh grievances time to accumulate. That growing list is testing both sides’ ability to keep ties steady between the world’s top economies. 
• The CFTC is monitoring trading in the oil futures market for unusual activity, its enforcement chief said.
• A key CFTC official said the agency will use its powers to root out insider trading in prediction markets.
• Here’s the latest news and analysis on the oil market. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day.  

• @ZeroHedge

• The U.A.E. official said the country was actively reviewing how it could play a military role in securing the strait, including efforts to help clear it of mines and other support services: WSJ.
• Russian Oil Exports Plunge After Drone Strikes Cripple Key Baltic Ports. 
• Multiple massive explosions have been reported in Bahrain and smoke is seen rising over the US Navy's Fifth Fleet HQ.
• JUST IN: A federal appeals court panel -- Henderson (GHWB), Wilkins (Obama) Katsas (Trump) -- has stayed Judge Lamberth's order requiring VOA to rehire a huge portion of its staff.
• DOJ Sues Minnesota Over Rules For Girls Sports.
• America is about to have a new neighbour with oil, cattle, and common sense. An Independent Alberta. The Texas of the North.  
• Trump has finally achieved his dream of 'regime change'—but in the region's maritime regime! The Strait of Hormuz will certainly reopen, but not for you; it will be open for those who comply with the new laws of Iran. The 47 years of hospitality are over forever. 
• *TRUMP TO ADDRESS NATION ON IRAN 9PM ET WEDNESDAY: LEAVITT.
• The states run these elections. If they want to use the U.S. Postal Service, they're going to get a barcode from the USPS, and they're going to put that on the envelope, and we will have one envelope per vote — none of this stuff where there's no certainty. (video)  
• We forked the leaked Claude Code source and made it work with ANY LLM: GPT, DeepSeek, Gemini, Llama, MiniMax. Open source. The name is OpenCode.
• 'Something Dark Is Going On': Nine Top-Level Scientists Die Or Go Missing In Past Year.
• Foreign Central Banks Dump $90 Billion In US Treasuries Since Start Of Iran War.
• Bullet Used in Charlie Kirk Murder Doesn't Match Alleged Weapon, Defense Claims.
• Today, we attacked the residence of American pilots and aircrew in Al Kharj, Saudi Arabia, with a drone and a missile, and struck a gathering of 200 people. Now, to the list of casualties and damages for Trump and Hegseth—apart from the AWACS, tankers, and fuel depots—a list of casualties and injuries to the flight crew has also been added.   
• Violent Israeli bombing of Iran's Natanz nuclear facility amid Iran; eyewitnesses say the explosion intensity is stronger than the Isfahan strike shown in last night's video. The Israeli airstrikes launched after Netanyahu's speech ended this evening. (video)   
• *TRUMP TO SIGN MAIL-IN VOTING EXECUTIVE ORDER: WHITE HOUSE. and an alarm just went off at some Biden-appointed activist judge's house. 
• One Man Thinks He Knows "Why Everything Sucks".
• *OPENAI VALUED AT $852 BILLION AFTER CLOSING $122 BILLION ROUND.
• Q1 In The Books: SaaSpocalypse Now, Oil Gets Crude Awakening, Credit Crushed, Gold Worst Since Lehman.

• @CNBC

• Dow surges 1,100 points, S&P 500 posts best day since May as hopes grow for end of Iran war. 
• Asia-Pacific markets set to rebound as Trump comments raise hopes of Iran war ending in weeks.
• Wednesday's big stock stories: What’s likely to move the market in the next trading session.
• Trump says U.S. will leave Iran in 'two or three weeks'.
• Stock futures are little changed after major averages post best session since May: Live updates.
• Stocks making the biggest moves after hours: Nike, Dave & Buster's, RH and more. 

Night Trading 

• Asian equity indices are +1.75% to +3.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 85.5 -7.75 basis points.
• China Sovereign CDS 49.25 -5.5 basis points.
• China Iron Ore Spot 106.3 USD/Metric Tonne +.8%. 
• Crude Oil 102.62/bbl. +1.2% 
• Gold 4,724.3 USD/t oz. +1.0%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.63 -.18%.
• Bloomberg Emerging Markets Currency Index 35.36 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 101.94 +.5%
• US 10-Year Yield 4.29% -2.0 basis points.
• Japan 30-Year Yield 3.66% -6.0 basis points. 
• Volatility Index(VIX) futures 24.8 -1.1%.
• Euro Stoxx 50 futures +1.8%. 
• S&P 500 futures +.16%.
• NASDAQ 100 futures +.26%.

Morning Preview Links

BOTTOM LINE: Asian indices are sharply higher, boosted by technology and consumer discretionary shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 50% net long heading into the day.