Stocks Slightly Higher into Final Hour on Diminished US Virus Mandate/Lockdown Fears, Year-End Window Dressing, Dollar Weakness, Transport/Construction Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line:  About Even
  

• Sector Performance:  Mixed
  

• Volume:  Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.3 -.1%
• Bloomberg Global Risk On/Risk Off Index 3,159.0 -40.0 points

• Euro/Yen Carry Return Index 134.98 +.47%

• Emerging Markets Currency Volatility(VXY) 11.3 +1.5%

• CBOE S&P 500 Implied Correlation Index 28.6 +5.5% 

• ISE Sentiment Index 125.0  +35.0 points
  

• Total Put/Call .77 -8.3%

• NYSE Arms 1.26 +35.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.55 -.46%
  

• US Energy High-Yield OAS 387.48 -.19%

• European Financial Sector CDS Index 54.75 -.55%

• Italian/German 10Y Yld Spread 135.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 77.75 -.07%
  

• Emerging Market CDS Index 188.0 -.12%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.94 +.06%

• 2-Year Swap Spread 19.5 +.25 basis point
  

• TED Spread 18.0 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap 3.0 +1.75 basis points
  
• MBS  5/10 Treasury Spread  68.0 -4.75 basis points
  
• IHS Markit CMBX BBB- 6 72.0 -.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 54.01 -.14%
• 3-Month T-Bill Yield .03% unch.
  

• Yield Curve 80.5 unch.
  

• China Iron Ore Spot 121.55 USD/Metric Tonne +.1%

• Citi US Economic Surprise Index 19.5 -.5 point

• Citi Eurozone Economic Surprise Index 29.8 +.9 point
  

• Citi Emerging Markets Economic Surprise Index -1.3 +1.1 points

• 10-Year TIPS Spread 2.59 -1.0 basis point
• 43.5%(unch.) chance of no change at March 16th FOMC meeting, 29.0%(+.8 percentage point) chance of no change at May 4th meeting

US Covid-19:

• 696 new infections/100K people(last 7 days total) +76/100K people
• New Covid-19 patient hospital admissions per 100K population -38.3% from peak 7-day avg. of 1/3/21-1/9/21
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +214 open in Japan 
• China A50 Futures: Indicating +55 open in China

• DAX Futures: Indicating -28 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/transport/industrial sector longs

• Disclosed Trades:  None
  

• Market Exposure:  75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.2%

Sector Underperformers:

• 1) Social Media -1.0% 2) Computer Hardware -.5% 3) Software -.5%

Stocks Falling on Unusual Volume: 

• WW, CSII, RKT, BCAB, PRCH, NVAX and DNAY
  

Stocks With Unusual Put Option Activity:

• 1) PACB 2) TECL 3) CTRA 4) EBAY 5) XLNX
  

Stocks With Most Negative News Mentions:

• 1) ZME 2) DIDI 3) PTON 4) MKFG 5) MARA
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.4%

Sector Outperformers:

• 1) Education +1.8% 2) Road & Rail +1.1% 3) REITs +.8%

Stocks Rising on Unusual Volume:

• BBIO, MBI, CONN, APTS, ARCB, RBLX and XPDI
  

Stocks With Unusual Call Option Activity:

• 1) DG 2) FTK 3) MBI 4) HLT 5) SIRI

Stocks With Most Positive News Mentions:

• 1) NTRB 2) MDRR 3) TEDU 4) GHC 5) XPEV
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -42.1% Below 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 54.2% of Issues Advancing, 41.4% Declining
• 70 New 52-Week Highs, 20 New Lows
• 51.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.2% 
• Bloomberg Global Risk-On/Risk-Off Index 3,167.0 -30.0 points
• Russell 1000: Growth/Value 18,228 -.32%
  
• Vix 17.6 +1.4%
• Total Put/Call .73 -13.1%
• TRIN/Arms 1.22 +34.7%

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 80.0 -1.0 basis point. 

• China Sovereign CDS 40.25 -.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 54.04 -.1%. 
• Bloomberg Global Risk-On/Risk Off Index 3,195.0 -4.0 points.
• Volatility Index(VIX) futures 19.8 -.7%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.09%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• None of note
  

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China PMI data could also impact global trading today.

US Equity Market Hours

• 9:30 am - 1:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Diminished US Virus Mandate/Lockdown Fears, Year-End Window Dressing, Short-Covering, Consumer Discretionary/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line:  Substantially Higher
  

• Sector Performance:  Most Sectors Rising
  

• Volume:  Light

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.7 -1.2%
• Bloomberg Global Risk On/Risk Off Index 3,248.0 +33.0 points

• Euro/Yen Carry Return Index 134.26 -.16%

• Emerging Markets Currency Volatility(VXY) 11.3 +1.2%

• CBOE S&P 500 Implied Correlation Index 25.9 +1.8% 

• ISE Sentiment Index 86.0  -59.0 points
  

• Total Put/Call .85 -7.6%

• NYSE Arms .65 -56.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.60 +.25%
  

• US Energy High-Yield OAS 386.34 +.63%

• European Financial Sector CDS Index 55.05 -1.3%

• Italian/German 10Y Yld Spread 135.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 77.80 -1.3%
  

• Emerging Market CDS Index 188.3 -.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.88 +.09%

• 2-Year Swap Spread 19.25 -.25 basis point
  

• TED Spread 18.0 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap 1.25 +6.25 basis points
  
• MBS  5/10 Treasury Spread  72.75 +4.5 basis points
  
• IHS Markit CMBX BBB- 6 72.25 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 54.06 -.73%
• 3-Month T-Bill Yield .03% -1.0 basis point
  

• Yield Curve 80.5 +6.75 basis points
  

• China Iron Ore Spot 121.20 USD/Metric Tonne +2.3%

• Citi US Economic Surprise Index 20.0 unch.

• Citi Eurozone Economic Surprise Index 28.9 +.7 point
  

• Citi Emerging Markets Economic Surprise Index -2.4 +1.6 points

• 10-Year TIPS Spread 2.60 +5.0 basis points
• 43.5%(+3.7 percentage points) chance of no change at March 16th FOMC meeting, 28.1%(+2.4 percentage points) chance of no change at May 4th meeting

US Covid-19:

• 620 new infections/100K people(last 7 days total) +70/100K people
• New Covid-19 patient hospital admissions per 100K -38.3% from peak 7-day avg. of 1/3/21-1/9/21
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +161 open in Japan 
• China A50 Futures: Indicating +101 open in China

• DAX Futures: Indicating -15 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/medical/industrial sector longs

• Disclosed Trades:  None
  

• Market Exposure:  75% Net Long