Bear Radar

Style Underperformer:

• Small-Cap Value -.7%

Sector Underperformers:

• 1) Homebuilders -2.2% 2) Gold & Silver -1.9% 3) REITs -1.6%

Stocks Falling on Unusual Volume: 

• NTRI, AKRX, AKCA, LL, LNTH, CRZO, MEDP, AZO, CRI, CRC, EXEL, CMCSA, SBAC and BAS

Stocks With Unusual Put Option Activity:

• 1) PZZA 2) CL 3) LL 4) DLTR 5)FIT

Stocks With Most Negative News Mentions:

• 1) FIT 2) NTRI 3) AKCA 4) CRZO 5) BMI

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.1%

Sector Outperformers:

• 1) I-Banks +1.1% 2) Healthcare Providers +.9% 3) Semis +.5%

Stocks Rising on Unusual Volume:

• MNK, DDS, PANW, PEGA, M, SNI, PDCE, CASA, TUSK, PLOW, NGHC, TWOU, THC, TCMD, WK, CLVS, FRAC, ANIP, MCHP, ETFC, GKOS, HHC, RLGY, DISCK, CBD, DK, UBNT, TCMD and KBR

Stocks With Unusual Call Option Activity:

• 1) MCHP 2) ON 3) M 4) GME 5) TOL

Stocks With Most Positive News Mentions:

• 1) DDS 2) FINL 3) PANW 4) BA 5) M

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +10.8% Above 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 32.5% of Issues Advancing, 64.6% Declining
• 89 New 52-Week Highs, 28 New Lows
• 50.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.5%
• Vix 16.5 +4.6%
• Total Put/Call .81 -12.0%
• TRIN/Arms .95 +21.7%

Tuesday Watch

Evening Headlines

Bloomberg:

• Apple(AAPL), Samsung Open Their Wallets, Boosting World's Economy. (video) Companies across the developing world are stepping up investment to meet rising demand from industrial economies in what’s shaping up as a further spur to already buoyant global growth. Big industrial economies including the U.S. and Japan led the recent recovery in capital expenditure. Now, such investment is broadening to emerging countries with Morgan Stanley’s tracker of economies not including China now at its highest level since 2011. "It is going from synchronized growth to synchronized capex," said Chetan Ahya, co-head of global economics at Morgan Stanley in Hong Kong.

• Bank of Korea Keeps Rate Unchanged in Lee’s Final Policy Meeting. With only modest inflationary pressure, the BOK will continue to move cautiously in coming quarters, given external risks related to trade, monetary policy and geopolitics, Tuuli McCully, head of Asia-Pacific Economics at Scotiabank, said before the decision. “We expect the next rate hike to take place closer to mid-2018,” McCully said.

• Global FANG Index Just Hit a Record High.

• Alibaba(BABA) to Buy Out Baidu(BIDU) in China’s Top Food Takeout App. (video)

• Global Equity Rally Extends in Asia Before Powell. Asian stocks built on the recent rally after U.S. shares reached a four-week high and investors bet monetary policy tightening won’t be too severe to derail the bull run in equities. Shares rose in Tokyo, Seoul and Sydney after the S&P 500 recovered most of the losses emanating from the slump that hit global stock markets at the start of the month. The 10-year Treasury yield was steady after falling to a two-week low as investors await the first public comments from Federal Reserve Chairman Jerome Powell on Tuesday. Oil extended its recent rebound. Japan’s Topix index climbed 0.7 percent as of 9:35 a.m. in Tokyo. The Nikkei 225 Stock Average gained 0.8 percent. Australia’s S&P/ASX 200 Index rose 0.5 percent. South Korea’s Kospi index added 0.3 percent. Futures on Hong Kong’s Hang Seng Index added 0.2 percent. Futures on the S&P 500 fell less than 0.1 percent. The S&P 500 rose 1.2 percent Monday.

• Five Things You Need to Know to Start Your Day. (video)

• U.S. Wireless Carriers Plan to Launch 5G With ‘Pucks’ Not Phones. AT&T Inc. and Verizon Communications Inc., conceding that phones won’t be available in time for the launch of fifth-generation mobile service this year, plan instead to offer 5G through portable hotspots called pucks.

Wall Street Journal: 

• Don’t Misjudge Trump’s Trade Tirade. The president may be shifting the discussion more than GOP elites think is possible.

• Blessed by Xi Jinping: The New Captain of China’s Economy. President to hand reins to former schoolmate, party loyalist Liu He.

MarketWatch.com: 

• Cloud-based software stocks including Salesforce.com(CRM) still have a long runway of growth.

Fox News: 

• Bernie Sanders struggles to address Russian support after Mueller indictment.

CNBC: 

• Dow rallies nearly 400 points, major averages down just 3% from all-time highs. (video)

• World's largest asset manager says get ready to 'stomach complete losses' in cryptocurrencies.

• Stocks making the biggest moves after hours: Fitbit, Nutrisystem, Palo Alto & more.

• Saudi king shakes up military leadership; names new generation to economic, security roles.

• Not interested in ‘your boycott war,’ HotelPlanner CEO says to companies cutting ties with NRA. (video)

• Apple(AAPL) just misses a new all-time high after Buffett boasts a big stake.

Zero Hedge:  

• Georgia Senate Effectively Blocks Delta Tax Break Bill After NRA Rejection.

• Fedex(FDX) Refuses To Bow To Pressure, Won't Discriminate Against NRA Members.

• Morgan Stanley Says The Great Bond Selloff Is Over. (graph)

• JPMorgan Warns Of "Extinction Level Event" For CTAs After Worst Month On Record. 

• Meet The California Special Agents Who Are "Coming For Your Guns".

• The 'Resistance' "Spectacle Of Roaring Dishonesty" Is A Disgrace.

• Stocks, Bonds, Bitcoin, Dollar, & Gold Rise (As Housing Collapses). (graph)

Night Trading 

• Asian equity indices are +.5% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 66.75 -2.75 basis points. 

• Asia Pacific Sovereign CDS Index 12.75 unch.

• Bloomberg Emerging Markets Currency Index 75.91 +.04%.

• FTSE 100 futures +.41%.

• S&P 500 futures unch.

• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AMT)/1.53

• (AZO)/8.85

• (CRI)/2.20

• (DISCA)/.43

• (EV)/.75

• (LL)/.08

• (M)/2.68

• (TOL)/.54

• (ALB)/1.21

• (EOG)/.53

• (ESRX)/2.09

• (HTZ)/-.59

• (JAZZ)/2.99

• (NBR)/-.34

• (PZZA)/.67

• (PCLN)/14.12

• (SQ)/.07

• (TDW)/-.72

• (WTW)/.31

• (WDAY)/.21

Economic Releases
8:30 am EST

• Advance Goods Trade Deficit for January is estimated at -$72.3B versus -$72.3B in December.

• Wholesale Inventories MoM for January are estimated to rise +.4% versus a +.4% gain in December.  

• Durable Goods Orders for January are estimated to fall -2.0% versus a +2.8% gain in December.

• Durables Ex Transports for January is estimated to rise +.5% versus a +.7% gain in December.

• Cap Goods Orders Non-Defense Ex-Air for January is estimated to rise +.5% versus a -.6% decline in December.
  

9:00 am EST

• The FHFA House Price Index MoM for December is estimated to rise +.4% versus a +.4% gain in November.

• The S&P CoreLogic CS 20-City MoM for December is estimated to rise +.6% versus a +.75% gain in November.
  

10:00 am EST

• The Richmond Fed Manufacturing Index for February is estimated to rise to 15.0 versus a reading of 14.0 in January.

• The Conference Board Consumer Confidence Index for February is estimated to rise to 126.4 versus 125.4 in January.
  

Upcoming Splits

• (BF/A) 5-for-4

Other Potential Market Movers

• The Eurozone Retail Sales/Industrial Production reports, US weekly retail sales reports, (JPM) investor day, (MINI) investor day and the (LH) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Lower Long-Term Rates, Less US/European/Emerging Markets Debt Angst, Technical Buying, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.66 +1.0%

• Euro/Yen Carry Return Index 137.10 +.19%

• Emerging Markets Currency Volatility(VXY) 8.16 -.97%

• S&P 500 Implied Correlation 36.70 -1.13%

• ISE Sentiment Index 88.0 -5.4%
  

• Total Put/Call .91 -6.19%

• NYSE Arms .82 -1.58%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.0 -3.0%
  

• America Energy Sector High-Yield CDS Index 364.0 -1.1%

• European Financial Sector CDS Index 54.52 -6.66%

• Italian/German 10Y Yld Spread 136.5 -5.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.69 +.25%

• Emerging Market CDS Index 116.84 -3.48%
  

• iBoxx Offshore RMB China Corporate High Yield Index 147.87 -.04%

• 2-Year Swap Spread 26.75 +1.75 basis points

• TED Spread 32.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -31.0 +.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.87 +.21%
• 3-Month T-Bill Yield 1.64% unch.
  

• Yield Curve 63.0 unch.

• China Iron Ore Spot 78.35 USD/Metric Tonne -.41%

• Citi US Economic Surprise Index 37.70 -12.4 points

• Citi Eurozone Economic Surprise Index -.3 +3.8 points

• Citi Emerging Markets Economic Surprise Index 7.20 +2.8 points

• 10-Year TIPS Spread 2.14 +2.0 basis points
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +236 open in Japan 
• China A50 Futures: Indicating +125 open in China

• DAX Futures: Indicating +38 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long