Stocks Soaring into Final Hour on Lower Long-Term Rates, Diminishing Trade War Fears, Bargain-Hunting, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.8 -13.1%

• Euro/Yen Carry Return Index 136.35 -.45%

• Emerging Markets Currency Volatility(VXY) 7.96 -1.0%

• S&P 500 Implied Correlation 47.32 -8.41%

• ISE Sentiment Index 121.0 unch.
  

• Total Put/Call .95 -29.6%

• NYSE Arms 1.12 +16.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 65.93 -2.21%
  

• America Energy Sector High-Yield CDS Index 448.0 -.63%

• European Financial Sector CDS Index 65.96 -2.94%

• Italian/German 10Y Yld Spread 129.0 -4.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 13.29 -1.23%

• Emerging Market CDS Index 137.0 -3.0%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.62 -.05%

• 2-Year Swap Spread 30.75 +2.75 basis points

• TED Spread 60.75 +5.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -6.5 +1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.31 +.30%
• 3-Month T-Bill Yield 1.70% -2.0 basis points
  

• Yield Curve 47.25 -2.0 basis points

• China Iron Ore Spot 64.41 USD/Metric Tonne +.58%

• Citi US Economic Surprise Index 49.8 +1.1 points

• Citi Eurozone Economic Surprise Index -56.80 +.4 point

• Citi Emerging Markets Economic Surprise Index 31.80 +.1 point

• 10-Year TIPS Spread 2.06 unch.
  
• 78.0% chance of Fed rate hike at June 13 meeting, 79.3% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +391 open in Japan 
• China A50 Futures: Indicating +139 open in China

• DAX Futures: Indicating +51 open in Germany

Portfolio: 

• Higher: On gains in my biotech/retail/industrial/medical/tech sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging markets shorts

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.9%

Sector Underperformers:

• 1) Coal +.2% 2) Restaurants +.3% 3) REITs +.4%

Stocks Falling on Unusual Volume: 

• ACXM, LFIN, GME, ADS, BB, CRTO and ANAB

Stocks With Unusual Put Option Activity:

• 1) HBI 2) AMLP 3) GME 4) LFIN 5) ZION

Stocks With Most Negative News Mentions:

• 1) CLD 2) EDGE 3) VSAT 4) CERN 5) SBUX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.3%

Sector Outperformers:

• 1) Steel +3.0% 2) Road & Rail +2.3% 3) Medical Equipment +1.9%

Stocks Rising on Unusual Volume:

• DBX, MOV, TITN, NOBL, RSPP, CJ, ENR, ARA, IIPR, SPB, PVH, HRTX, UNT, LNN, PLT, BTI, APEI, MGNX, IGV, HRG, UN, MEOH, RLH, VRNT, SAIC, FMC, FB, TSLA, STZ and CXO

Stocks With Unusual Call Option Activity:

• 1) GME 2) MDR 3) RF 4) FLR 5) ZEN

Stocks With Most Positive News Mentions:

• 1) VRNT 2) TITN 3) MOV 4) PVH 5) PLT

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -15.6% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 76.9% of Issues Advancing, 20.2% Declining
• 20 New 52-Week Highs, 34 New Lows
• 37.54% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.17%
• Vix 21.1 -7.6%
• Total Put/Call .97 -28.2%
• TRIN/Arms 1.0 +5.8%

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 79.25 +.5 basis point. 

• Asia Pacific Sovereign CDS Index 13.5 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 75.10 +.01%.

• FTSE 100 futures +.02%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.30%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ANGO)/.19

• (STZ)/1.74

• (FINL)/.58

• (WOR)/.75

• (TITN)/-.14

• (MOV)/.26

• (LNN)/.59

Economic Releases
8:30 am EST

• Personal Spending for February is estimated to rise +.2% versus a +.2% gain in January.

• Personal Income for February is estimated to rise +.4% versus a +.4% gain in January.

• The PCE Core MoM for February is estimated to rise +.2% versus a +.3% gain in January.

• Initial Jobless Claims for last week are estimated to rise to 230K versus 229K the prior week.

• Continuing Claims are estimated to rise to 1870K versus 1828K prior.

9:45 am EST

• The Chicago Purchasing Manager report for March is estimated to rise to 62.0 versus 61.9 in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Harker speaking, Japan Unemployment report, Japan Industrial Production report, UK GDP report, weekly Bloomberg Consumer Comfort Index and the Sidoti Spring Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by pharma and industrial 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 Slightly Higher into Final Hour on Earnings Optimism, Buyout Speculation, Yen Weakness, Retail/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.1 +7.0%

• Euro/Yen Carry Return Index 136.88 +.61%

• Emerging Markets Currency Volatility(VXY) 8.02 -.25%

• S&P 500 Implied Correlation 50.99 +3.93%

• ISE Sentiment Index 121.0 unch.
  

• Total Put/Call 1.34 +25.23%

• NYSE Arms .95 -38.62%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.63 +1.21%
  

• America Energy Sector High-Yield CDS Index 444.0 +.29%

• European Financial Sector CDS Index 67.96 +1.58%

• Italian/German 10Y Yld Spread 133.75 -5.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 13.45 +1.81%

• Emerging Market CDS Index 141.53 -1.65%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.69 +.07%

• 2-Year Swap Spread 28.0 unch.

• TED Spread 55.25 +3.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -7.75 -3.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.08 -.31%
• 3-Month T-Bill Yield 1.72% -3.0 basis points
  

• Yield Curve 49.25 -1.5 basis points

• China Iron Ore Spot 63.20 USD/Metric Tonne +.19%

• Citi US Economic Surprise Index 48.7 +1.5 points

• Citi Eurozone Economic Surprise Index -57.20 +.3 point

• Citi Emerging Markets Economic Surprise Index 31.70 -1.3 points

• 10-Year TIPS Spread 2.06 -1.0 basis point
  
• 79.4% chance of Fed rate hike at June 13 meeting, 80.3% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +254 open in Japan 
• China A50 Futures: Indicating -104 open in China

• DAX Futures: Indicating -4 open in Germany

Portfolio: 

• Higher: On gains in my biotech/retail sector longs, index hedges and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges 

• Market Exposure: Moved to 50% Net Long