Stocks Reversing Higher into Final Hour on Mideast Ceasefire Holds Hopes, Stable Long-Term Rates, Earnings Outlook Optimism, Homebuilding/Financial Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 54.8 -1.8%
• BofA Private Credit Proxy Index 72.2 -.7% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 unch.
• BofA Global Financial Stress Indicator .19 -14.0 basis points
• European Financial Sector CDS Index 63.5 -1.6%
• Emerging Market CDS Index 161.3 -2.3%
• Israel Sovereign CDS 73.9 -.5% 
• Bloomberg Global Trade Policy Uncertainty Index .6 -.1
• US Morning Consult Daily Consume Sentiment Index 88.5 -2.4

• Citi US Economic Surprise Index 19.5 -9.0

• Citi Eurozone Economic Surprise Index -20.1 -2.1

• Citi Emerging Markets Economic Surprise Index 40.7 -1.4 
• S&P 500 Current Quarter EPS Growth Rate YoY(18 of 500 reporting) +81.3% -4.3 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 337.42 +.41:  Growth Rate +21.5% +.1 percentage point, P/E 20.2 +.7
• S&P 500 Current Year Estimated Profit Margin 15.06% -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 800.48 +2.68: Growth Rate +101.2% +.2 percentage point, P/E 18.5 +.7 
• Bloomberg US Financial Conditions Index .66 +16.0 basis points
• US Yield Curve 50.75 basis points (2s/10s) +.25 basis point
• Bloomberg Industrial Metal Index 171.1 -.3%
• Dutch TTF Nat Gas(European benchmark) 46.2 euros/megawatt-hour +1.9% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 20.5% +2.0 percentage points
• US Atlanta Fed GDPNow Q1 Forecast +1.3% unch.
• US 10-Year T-Note Yield 4.29% unch.
• 1-Year TIPS Spread 5.47 -1.5 basis points

• Highest target rate probability for June 17th FOMC meeting: 94.7% (-2.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for July 29th meeting: 92.7%(-4.3 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +870 open in Japan 
• China A50 Futures: Indicating -6 open in China

• DAX Futures: Indicating +270 open in Germany

Portfolio:

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

Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.0%

Sector Underperformers:

• 1) Software -4.9% 2) Cyber Security -4.5% 3) Computer Services -2.8%

Stocks Falling on Unusual Volume: 

• LYTS, BBVA, SAP, AAOI, TU, CWK, MEOH, VEEV, GLAD, WDAY, LB, HUBS, TEAM, PLTR, NOW, INTU, VG, AXON, SAIL, NET, SPIR, SNOW, ZS, FSLY, TPL and SMPL

Stocks With Unusual Put Option Activity:

• 1) FUBO 2) SOUN 3) CSX 4) ADMA 5) STZ

Stocks With Most Negative News Mentions:

• 1) SMPL 2) NAVN 3) ZS 4) APLD 5) SMR

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) XLV 3) XOP 4) SOXX 5) VGT

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.7%

Sector Outperformers:

• 1) Regional Banks +2.0% 2) Homebuiders +1.6% 3) Semis +1.6%

Stocks Rising on Unusual Volume:

• FBRX, STAA, YSS, WOLF, BF/B, MPLT, INBX, CAL, AXTI, WSR, GLXY, TPB, GBX, AEHR, JBIO, BWAY, PSIX, STZ, AVBP, PVLA, KODK, INFQ, ELVN, WULF, INSP, ADTN, VRDN, MESO, CTS, NBIS, INFQ, MYRG, CROX, URGN, AMZN, PWP, UCB, CRWV, SSSS, EXTR, HUT, MRVL, APLE, TH, AXIA, LEVI, ASND, BDC, DBD, RHLD, MDA, FOXA, RPM and HLIO

Stocks With Unusual Call Option Activity:

• 1) BB 2) SPIR 3) NN 4) PRMW 5) SOXX 

Stocks With Most Positive News Mentions:

• 1) EOSE 2) STAA 3) FBRX 4) WSR 5) BF/B

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) XLI 3) IGV 4) XLK 5) XLY

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:

• None of note

After the Close: 

• None of note

Economic Releases 

8:30 am EST 

• Real Avg. Weekly Earnings YoY for March.
• The CPI MoM for March is estimated to rise +.9% versus a +.3% gain in Feb.
• The Core CPI MoM for March is estimated to rise +.3% versus a +.2% gain in Feb. 

10:00 am EST

• Factory Orders for Feb. is estimated to fall -.2% versus a +.1% gain in Jan.
• Factory Orders Ex Transports for Feb. is estimated to rise +.4% versus a +.4% gain in Jan.
• Univ. of Mich. Consumer Confidence for April is estimated to fall to 51.5 versus 53.3 in March.
• Univ. of Mich. 1Y Inflation Expectations Index for April is estimated at +4.2% versus prior expectations of a +3.8% gain.
• Final Durable Goods Orders readings for Feb.  

2:00 pm EST

• The Federal Budget Deficit for March is estimated at -$153.3B versus -$160.5B in Feb. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Cleveland CPI MoM for March, weekly US Baker Hughes rig count and the weekly CFTC speculative net positioning reports 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 -8.4% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.9 +.7
• 9 Sectors Rising, 2 Sectors Declining
• 60.6% of Issues Advancing, 37.4% Declining 
• TRIN/Arms 1.60 -14.0%
• Non-Block Money Flow -$153.5M
  
• 122 New 52-Week Highs, 39 New Lows
• 54.9% (+1.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.1 +1.3

Polymarket: 

• How long will the DHS shutdown last? 70+ days 64.0% +4.0 percentage points
• Will China invade Taiwan by end of 2026? 9.0% unch.
• Israel x Hezbollah ceasefire by April 30th 49.0% +10.0 percentage points 
• US Invades Iran before 2027 30.0% -4.0 percentage points
• Trump announces end of military operations against Iran by April 30th 55.0% +6.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 107.2 +.7%
• Global Monitor Iran Instability Index 100.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 94.0% +2.0 percentage points
• US High-Yield Tech Sector OAS Index 512.5 +16.25 basis points
• Bloomberg Cyclicals/Defensives Index 249.7 -.3%
• Morgan Stanley Growth vs Value Index 136.6 -.8%
• CNN Fear & Greed Index 36.0 (FEAR) +6.0
• 1-Day Vix 13.0 -21.1%
  
• Vix 19.8 -5.8%
  
• Total Put/Call .98 unch.

Thursday Watch

Night Trading 

• Asian equity indices are -.5% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 76.0 -2.0 basis points.
• China Sovereign CDS 45.0 -5.0 basis points
• China Iron Ore Spot 104.7 USD/Metric Tonne -1.0%. 
• Crude Oil 97.0/bbl. +2.7% 
• Gold 4,737.0 USD/t oz. -.9%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.64 -.01%.
• Bloomberg Emerging Markets Currency Index 35.7 unch.
• Bloomberg Global Risk-On/Risk Off Index 108.3 +.8%
• US 10-Year Yield 4.30% unch.
• Japan 30-Year Yield 3.65% +4.0 basis points. 
• Volatility Index(VIX) futures 22.3 +1.6%.
• Euro Stoxx 50 futures +.09%. 
• S&P 500 futures -.14%.
• NASDAQ 100 futures -.23%.

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 lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.