Stocks Rising into Afternoon on Mideast War Resolution Hopes, Earnings Outlook Optimism, Less Fed Chair Uncertainty, Tech/Shipping Sector Strength

Overseas Futures:

• Nikkei 225 Futures: Indicating +325 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating +210 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/tech sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 100% Net Long

Monday's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (DPZ)/4.27
• (NE)/.21
• (VZ)/1.21 

After the Close: 

• (AMKR)/.24
• (AVB)/2.80
• (BBBY)/-.28
• (BRO)/1.36
• (CDNS)/1.88
• (CLS)/2.08
• (CR)/1.45
• (NUE)/2.82
• (PSA)/4.12
• (SANM)/2.40
• (VTR)/.91 

Economic Releases 

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for April. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The 2/5Y T-Note auctions, Evercore Transport/Logistics Summit, (VMI) annual meeting, (BLD) annual meeting, (GPC) annual meeting and the (WEX) investor meeting could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Friday Watch

Night Trading 

• Asian equity indices are -.5% to +.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 74.75 +1.5 basis points. 
• China Sovereign CDS 44.75 +1.25 basis points.
• China Iron Ore Spot 106.75 USD/Metric Tonne -.%. 
• Crude Oil 93.74/bbl. +.% 
• Gold 4,734.7 USD/t oz. -.%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.70 -.02%.
• Bloomberg Emerging Markets Currency Index 35.58 -.08%.
• Bloomberg Global Risk-On/Risk Off Index 113.4 -.3%
• US 10-Year Yield 4.33% unch.
• Japan 30-Year Yield 3.67% +3.0 basis points. 
• Volatility Index(VIX) futures 20.6 -.2%.
• Euro Stoxx 50 futures -.68%. 
• S&P 500 futures +.2%.
• NASDAQ 100 futures +.7%.

Morning Preview Links

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

Stocks Reversing Lower into Final Hour on Mideast War Ceasefire Jitters, Global Supply Chain Disruption Worries, Technical Selling, Consumer Discretionary/Biotech Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 54.4 +.6%
• BofA Private Credit Proxy Index 74.5 -2.2% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 -1.0 basis point
• BofA Global Financial Stress Indicator .01 -3.0 basis points
• European Financial Sector CDS Index 62.5 +.3%
• Emerging Market CDS Index 161.7 +2.2%
• Israel Sovereign CDS 70.5 +1.4% 
• Bloomberg Global Trade Policy Uncertainty Index .5 unch.
• US Morning Consult Daily Consume Sentiment Index 89.7 -1.4

• Citi US Economic Surprise Index 11.9 +3.7

• Citi Eurozone Economic Surprise Index -43.1 -10.5

• Citi Emerging Markets Economic Surprise Index 39.7 +11.1
• S&P 500 Current Quarter EPS Growth Rate YoY(121 of 500 reporting) +25.4% -4.6 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 342.0 +.49:  Growth Rate +23.4% +.4 percentage point, P/E 20.8 -.1
• S&P 500 Current Year Estimated Profit Margin 15.16% +8.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) +314.5% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 821.11 +1.40: Growth Rate +107.4% +1.4 percentage points, P/E 19.6 -.1 
• Bloomberg US Financial Conditions Index .87 +4.0 basis points
• US Yield Curve 49.75 basis points (2s/10s) unch.
• Bloomberg Industrial Metal Index 180.9 -.1%
• Dutch TTF Nat Gas(European benchmark) 45.4 euros/megawatt-hour +4.2% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 19.9% -1.6 percentage points
• US Atlanta Fed GDPNow Q1 Forecast +1.2% unch.
• US 10-Year T-Note Yield 4.32% +2.0 basis points
• 1-Year TIPS Spread 3.64 +10.0 basis points

• Highest target rate probability for June 17th FOMC meeting: 95.8% (-2.5 percentage points) chance of 3.5%-3.75%. Highest target rate probability for July 29th meeting: 91.7%(-2.4 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -230 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating +53 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.2%

Sector Underperformers:

• 1) Computer Services -8.0% 2) Software -5.7% 3) Cyber Security -3.3%

Stocks Falling on Unusual Volume: 

• SRPT, HAE, DHR, LUV, TSLA, GGG, EXTR, LMT, AMSC, PEGA, INFY, TH, SPIR, CBAN, SAP, XPEV, SMR, OSBC, EPAM, ADBE, POET, AMG, INFQ, SMMT, IBM, CCS, CRM, LVS, MPLT, TMO, FCX, RGEN, LWLG, LULU, NBBK, TAL, ALMU, CASH, GRPN, RDW, STRA, YSS, WEX, XNDU, NOW, MEDP and ASGN

Stocks With Unusual Put Option Activity:

• 1) STNE 2) RSP 3) SAP 4) TXN 5) QS

Stocks With Most Negative News Mentions:

• 1) MEDP 2) CAR 3) LULU 4) TMO 5) SNOW

Sector ETFs With Most Negative Money Flow:

• 1) SOXX 2) XLI 3) XLF 4) FDN 5) XBI

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.3%

Sector Outperformers:

• 1) Road & Rail +2.9% 2) Electrification +2.4% 3) Utilities +2.2%

Stocks Rising on Unusual Volume:

• URI, TXN, EQPT, PENN, HRI, HELE, STM, WST, APLD, SEDG, MOH, ON, MCHP, GSHD, NXT, NUCL, CMCSA, WCN, LBRT, R, VELO, VC, CHDN, UNP, VC, PKG, IREN, THRM, KDP, NEE, NXPI, CSX, CX, INBX, DOV, CX, OKLO, SEIC, RDY, TFIN, ORA, HXL, BANR, CAMT, WSC, VOYA, MRLN, WSC, MRVL, STVN, NOK, ARM, KNX, SON, STC, FBNC, ERAS, CACI, FCFS, DIOD, GEV, VLY, PTEN and CURB

Stocks With Unusual Call Option Activity:

• 1) NMAX 2) ASST 3) KDP 4) CGC 5) ASHR 

Stocks With Most Positive News Mentions:

• 1) POET 2) GEV 3) MCRI 4) TLRY 5) MAS

Sector ETFs With Most Positive Money Flow:

• 1) XLY 2) XLK 3) ARKK 4) IFRA 5) DRAM

Charts:

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