Stocks Close Slightly Higher on Economic Optimism, Earnings Outlooks, Oil Gain, Retail/Industrial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Heavy

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.82 -4.64%

• Euro/Yen Carry Return Index 135.78 -.38%

• Emerging Markets Currency Volatility(VXY) 7.88 -.25%

• S&P 500 Implied Correlation 41.98 -6.09%

• ISE Sentiment Index 91.0 -13.33%
  

• Total Put/Call .99 +12.5%

• NYSE Arms .81 -28.01%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.67 -1.95%
  

• America Energy Sector High-Yield CDS Index 401.0 +.24%

• European Financial Sector CDS Index 51.67 -1.95%

• Italian/German 10Y Yld Spread 141.25 +.25 basis point
  

• Asia Pacific Sovereign Debt CDS Index 11.33 -.7%

• Emerging Market CDS Index 118.57 -.1%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.41 +.02%

• 2-Year Swap Spread 32.25 +2.5 basis points

• TED Spread 40.5 +3.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -22.5 -9.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.13 -.44%
• 3-Month T-Bill Yield 1.77% unch.
  

• Yield Curve 55.5 +1.0 basis point

• China Iron Ore Spot 67.10 USD/Metric Tonne +.88%

• Citi US Economic Surprise Index 45.8 +6.1 points

• Citi Eurozone Economic Surprise Index -31.70 -.1 point

• Citi Emerging Markets Economic Surprise Index 39.30 -.2 point

• 10-Year TIPS Spread 2.09 unch.
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -206 open in Japan 
• China A50 Futures: Indicating +20 open in China

• DAX Futures: Indicating +26 open in Germany

Portfolio: 

• Slightly Higher: On gains in my retail/industrial sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +28.1% Above 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 53.0% of Issues Advancing, 42.2% Declining
• 12 New 52-Week Highs, 53 New Lows
• 46.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.9%
• Vix 15.6 -5.8%
• Total Put/Call .79 -10.2%
• TRIN/Arms .61 -46.1%

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 66.25+.75 basis point. 
• Asia Pacific Sovereign CDS Index 11.5 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 75.09 -.05%.
• FTSE 100 futures -.23%.
• S&P 500 futures -.14%.
• NASDAQ 100 futures -.13%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BKE)/.72
• (CTRN)/.44
• (HIBB)/.45
• (PERY)/.83
• (TIF)/1.63

Economic Releases

8:30 am EST

• Housing Starts for February is estimated to fall to 1290K versus 1326K in January.
• Building Permits for February is estimated to fall to 1320K versus 1396K in January. 

9:15 am EST

• Industrial Production MoM for February is estimated to rise +.4% versus a -.1% decline in January.
• Manufacturing Production for February is estimated to rise +.5% versus unch. in January.
• Capacity Utilization for February is estimated to rise to 77.7% versus 77.5% in January.

10:00 am EST

• JOLTS Job Openings for January is estimated to rise to 5900 versus 5811 in December.
• Preliminary Univ. of Mich. Consumer Sentiment for March is estimated to fall to 99.2 versus 99.7 in February.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone CPI report and the (UTX) analyst meeting could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology 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 50% net long heading into the day.

Stocks Slightly Higher into Afternoon on Diminished Trade War Fears, Oil Gain, Short-Covering, Healthcare/Restaurant Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.44 -4.59%

• Euro/Yen Carry Return Index 136.31 -.47%

• Emerging Markets Currency Volatility(VXY) 7.79 unch.

• S&P 500 Implied Correlation 42.10 -.73%

• ISE Sentiment Index 108.0 +52.11%
  

• Total Put/Call .78 -25.0%

• NYSE Arms 1.30 +1.09%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.62 -.62%
  

• America Energy Sector High-Yield CDS Index 399.0 +.35%

• European Financial Sector CDS Index 52.76 +1.03%

• Italian/German 10Y Yld Spread 141.0 -1.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 11.42 +1.92%

• Emerging Market CDS Index 119.20 +2.33%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.38 +.10%

• 2-Year Swap Spread 29.75 +1.5 basis point

• TED Spread 36.75 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -31.75 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.13 -.44%
• 3-Month T-Bill Yield 1.77% +2.0 basis points
  

• Yield Curve 54.5 -.75 basis point

• China Iron Ore Spot 69.23 USD/Metric Tonne -1.24%

• Citi US Economic Surprise Index 39.70 -.1 point

• Citi Eurozone Economic Surprise Index -31.60 +.1 point

• Citi Emerging Markets Economic Surprise Index 39.50 +.4 point

• 10-Year TIPS Spread 2.09 +1.0 basis point
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -144 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating -8 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/industrial sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long