Stocks Slightly Higher into Final Hour on Healthcare/Tax Reform Hopes, Earnings Optimism, Short-Covering, Tech/Road & Rail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Outpeforming
  

Equity Investor Angst:

• Volatility(VIX) 10.52 -3.04%

• Euro/Yen Carry Return Index 126.27 -.12%

• Emerging Markets Currency Volatility(VXY) 8.73 -.68%

• S&P 500 Implied Correlation 41.99 -.02%

• ISE Sentiment Index 117.0 +27.17%
  

• Total Put/Call .89 +14.1%

• NYSE Arms 1.40 +16.42%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.62 +.43%
  

• America Energy Sector High-Yield CDS Index 371.0 -.15%

• European Financial Sector CDS Index 75.25 +1.69%

• Western Europe Sovereign Debt CDS Index 9.45 -1.56%

• Asia Pacific Sovereign Debt CDS Index 22.54 -.13%

• Emerging Market CDS Index 198.22 -1.55%
  

• iBoxx Offshore RMB China Corporate High Yield Index 137.16 +.02%

• 2-Year Swap Spread 30.5 -.5 basis point

• TED Spread 37.0 +1.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -31.5 -3.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.25 -.07%
• 3-Month T-Bill Yield .80% -1.0 basis point
  

• Yield Curve 104.0 unch.
  

• China Import Iron Ore Spot $66.42/Metric Tonne -.30%

• Citi US Economic Surprise Index 4.10 -3.0 points

• Citi Eurozone Economic Surprise Index 61.20 +10.9 points

• Citi Emerging Markets Economic Surprise Index 39.1 +.2 point

• 10-Year TIPS Spread 1.93 +!.0 basis point
  
• 69.7% chance of Fed rate hike at June 14 meeting, 72.0% chance at July 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -6 open in Japan 
• China A50 Futures: Indicating -17 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.3%

Sector Underperformers:

• 1) Oil Service -3.2% 2) Gold and Silver -2.4% 3) Steel -1.5%

Stocks Falling on Unusual Volume: 

• SNCR, ICHR, BRKL, MLNX, ISLE, NTGR, KS, FCN, FFIV, DLNG, BMS, ZBH, ETH, NBR, SERV, HZO, TDC, RDN, WYN, AVT, KNH, TSCO, APC, AAL, HP, EQT, NEWM, NTRI, FTI, WCC and PTEN

Stocks With Unusual Put Option Activity:

• 1) CIT 2) EXAS 3) NBR 4) GRUB 5) COG

Stocks With Most Negative News Mentions:

• 1) BWLD 2) WYN 3) FFIV 4) MLNX 5) AKAM

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Road & Rail +2.5% 2) Social Media +1.8% 3) Gaming +1.4%

Stocks Rising on Unusual Volume:

• TRU, AKBA, CIT, EXAS, PYPL, TRUE, GRUB, OSIS, UCTT, LMAT, TER, ROG, UAA, KKR, CACQ, FWRD, NWHM, TRS, TREE, DPZ, HF, NOW, XLNX, ASGN, WST, PRTY, CRY, CVI, ESND, GGG, COHU, INTU, QTNA, ASGN, FAF, PRLB, POL, MKSI, XLRN, FSS, TWTR, KKR, KSU, CZR and DLTH

Stocks With Unusual Call Option Activity:

• 1) MAR 2) CIT 3) XLNX 4) NBR 5) HD

Stocks With Most Positive News Mentions:

• 1) UAA 2) XLNX 3) NOW 4) DISH 5) WDC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +18.9% Above 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 49.4% of Issues Advancing, 46.6% Declining
• 201 New 52-Week Highs, 14 New Lows
• 57.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.0%
• Vix 10.61 -2.21%
• Total Put/Call .66 -15.4%
• TRIN/Arms 1.65 +37.2%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 92.75 -.5 basis point. 

• Asia Pacific Sovereign CDS Index 22.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 72.35 +.06%.

• S&P 500 futures +.06%. 

• NASDAQ 100 futures +.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (APD)/1.38

• (ALXN)/1.24

• (AB)/.44

• (AAL)/.57

• (AMT)/1.40

• (AZN)/.82

• (BWA)/.84

• (BSX)/.30

• (BMY)/.74

• (CBG)/.34

• (CELG)/1.63

• (CLF)/.20

• (CME)/1.20

• (CMCSA)/.45

• (DPZ)/1.17

• (DOW)/.99

• (F)/.34

• (JCI)/.49

• (LLL)/1.81

• (MGM)/.31

• (PH)/1.86

• (POT)/.11

• (PX)/1.33

• (RTN)/1.60

• (RS)/1.40

• (LUV)/.63

• (UAA)/-.04

• (UNP)/1.23

• (UPS)/1.29

• (ZBH)/2.11

• (AFL)/1.62

• (GOOG)/9.42

• (AMZN)/1.10

• (BIDU)/.92

• (CERN)/.58

• (EXPE)/.09

• (GPRO)/-.45

• (INTC)/.65

• (KLAC)/1.55

• (MSFT)/.70

• (MHK)/2.72

• (SKYW)/.52

• (SBUX)/.45

• (WDC)/2.14

Economic Releases  

8:30 am EST

• Advance Goods Trade Balance for March is estimated at -$65.2B versus -$63.9B in February.

• Preliminary Wholesale Inventories MoM for March is estimated to rise +.2% versus a +.4% gain in February.

• Preliminary Durable Goods Orders for March is estimated to rise +1.3% versus a +1.8% gain in February.

• Preliminary Durables Ex Transports for March is estimated to rise +.4% versus a +.5% gain in February.

• Preliminary Cap Goods Orders Non-Defense Ex Air for March are estimated to rise +.5% versus a -.1% decline in February.

• Initial Jobless Claims for last week are estimated to rise to 245K versus 244K the prior week. 

• Continuing Claims are estimated to rise to 2007K versus 1979K prior.
  

10:00 am EST

• Pending Home Sales MoM for March are estimated to fall -1.0% versus a +5.5% gain in February.
  

11:00 am EST

• Kansas City Fed Manufacturing Activity for April is estimated to fall to 17.0 versus 20.0 in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Consumer Confidence report, China Industrial Production report, Japan CPI report, $28B 7Y T-Note auction and the (PFE) annual meeting could also impact trading today.

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