Stocks Falling into Final Hour on Global Growth Fears, Yen Strength, Oil Decline, Financial/Energy Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 16.06 +17.8%

• Euro/Yen Carry Return Index 129.14 -1.41%

• Emerging Markets Currency Volatility(VXY) 8.38 +6.89%

• S&P 500 Implied Correlation 39.50 -15.6%

• ISE Sentiment Index 58.0 -26.6%
  

• Total Put/Call .85 +16.4%

• NYSE Arms 1.72 +39.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.76 +3.19%
  

• America Energy Sector High-Yield CDS Index 520.0 +.62%

• European Financial Sector CDS Index 88.17 +5.95%

• Italian/German 10Y Yld Spread 246.25 +4.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 71.92 -.48%
  

• Emerging Market CDS Index 177.50 +6.74%
  

• iBoxx Offshore RMB China Corporate High Yield Index 160.34 +.17%

• 2-Year Swap Spread 8.75 -.5 basis point

• TED Spread 15.75 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -12.0 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.23 -1.37%
• 3-Month T-Bill Yield 2.45% unch.

• Yield Curve 13.0 +.25 basis point

• China Iron Ore Spot 83.55 USD/Metric Tonne +1.42%

• Citi US Economic Surprise Index -33.80 -1.6 points

• Citi Eurozone Economic Surprise Index -60.0 -34.9 points

• Citi Emerging Markets Economic Surprise Index -20.90 +.4 point

• 10-Year TIPS Spread 1.91 -5.0 basis points
• 18.4% chance of Fed rate cut at June 19th meeting, 25.7% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -582 open in Japan 
• China A50 Futures: Indicating -158 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

• Lower: On losses in my industrial/tech/retail/medical/biotech sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -3.4%

Sector Underperformers:

• 1) Oil Service -5.0% 2) Banks -3.9% 3) Alt Energy -3.6%

Stocks Falling on Unusual Volume: 

• HRZN, CHGG, CPLG, ZUO, SMAR, KEY, CTAS, KMT, SGRY, RF, CRZO, COOP, TEN, HSC, GOL, AMG, JKS, COUP, CRC, SIVB, GBX, CAL, TCBI, GES, GH, AL, AMTD, ZION and NKE

Stocks With Unusual Put Option Activity:

• 1) AET 2) BBT 3) TIF 4) PNC 5) AMTD

Stocks With Most Negative News Mentions:

• 1) CNAT 2) TRN 3) LULU 4) PPG 5) XPO

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -1.5%

Sector Outperformers:

• 1) Utilities +1.1% 2) Homebuilding +.1% 3) Restaurants +.1%

Stocks Rising on Unusual Volume:

• HIBB, EB, TIF, FIS, PZZA, YETI, TS, RAVN, FTDR, WP, RRGB, CAG, TLT, SJM, VTR, FAF, ARCE, ANIP, DTE, LGIH, SO and BPTH

Stocks With Unusual Call Option Activity:

• 1) PZZA 2) LEN 3) TIF 4) NKE 5) FITB

Stocks With Most Positive News Mentions:

• 1) HIBB 2) TIF 3) T 4) PZZA 5) RAVN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +20.6% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 25.7% of Issues Advancing, 72.2% Declining
• 120 New 52-Week Highs, 40 New Lows
• 48.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.4%
• Vix 14.8 +8.4%
• Total Put/Call .89 +21.9%
• TRIN/Arms 1.4 +11.4%

Friday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 72.25 -1.75 basis points. 

• China Sovereign CDS 47.75 -2.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 68.15 -.03%.

• FTSE 100 futures +.94%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (HIBB)/.39
• (JKS)/.48
• (TIF)/1.60

Economic Releases
9:45 am EST

• The Markit US Manufacturing PMI for March is estimated to rise to 53.5 versus 53.0 in February.
• The Markit US Services PMI for March is estimated to fall to 55.5 versus 56.0 in February.
  

10:00 am EST

• Wholesale Inventories MoM for Jan. are estimated to rise +.1% versus a +1.1% gain in Dec.
• Existing Home Sales for Feb. is estimated to rise to 5.1M versus 4.94M in Jan.

2:00 pm EST

• The Monthly Budget Statement for Feb. is estimated to widen to -$227.0B versus -$215.2B in Jan.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurzone Services PMI report could also impact trading today.

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

Stocks Surging into Final Hour on Diminished Global Growth Worries, Dovish FOMC Commentary, Technical Buying, Gaming/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 13.52 -3.5%

• Euro/Yen Carry Return Index 130.76 -.41%

• Emerging Markets Currency Volatility(VXY) 7.92 +2.06%

• S&P 500 Implied Correlation 37.22 -5.72%

• ISE Sentiment Index 81.0 +24.62%
  

• Total Put/Call .69 -19.8%

• NYSE Arms 1.61 +29.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.35 -1.68%
  

• America Energy Sector High-Yield CDS Index 519.0 +1.43%

• European Financial Sector CDS Index 83.21 +5.76%

• Italian/German 10Y Yld Spread 241.5 +1.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 72.69 -.85%
  

• Emerging Market CDS Index 166.27 +.35%
  

• iBoxx Offshore RMB China Corporate High Yield Index 160.06 +.03%

• 2-Year Swap Spread 9.25 -1.75 basis points

• TED Spread 16.0 -3.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -13.25 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 68.13 -.23%
• 3-Month T-Bill Yield 2.45% unch.

• Yield Curve 12.75 -1.25 basis points

• China Iron Ore Spot 81.687 USD/Metric Tonne +.59%

• Citi US Economic Surprise Index -32.20 +3.2 points

• Citi Eurozone Economic Surprise Index -25.10 +.4 point

• Citi Emerging Markets Economic Surprise Index -21.30 +2.2 points

• 10-Year TIPS Spread 1.96 -1.0 basis point
• 8.5% chance of Fed rate cut at June 19th meeting, 15.2% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -199 open in Japan 
• China A50 Futures: Indicating +33 open in China

• DAX Futures: Indicating +50 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long