Tuesday Watch

Evening Headlines

Bloomberg:                

• Trump Says Coronavirus Travel Ban May Extend to More Countries.

• As Rest of World Locks Down, China Struggles to Get Shoppers Out.

• Retailers Furlough 500,000 Despite Stimulus Law, More Expected.

• New York City Marshals All Hospitals; Navy Sails In to Help.

• Stay-at-Home Orders Expand; J&J in Vaccine Deal: Virus Update.

• Asia Stocks Set to Track U.S. Higher; Dollar Gains: Markets Wrap. Asian stocks looked set to rise after a rally in their U.S. counterparts, as investors saw glimmers of optimism in efforts to deliver rapid testing for the new coronavirus. The dollar climbed. Futures pointed higher in Japan and Hong Kong on the last trading day of the quarter. Australia opened modestly higher. S&P 500 futures were little changed in Asia after the index climbed for the fourth time in five days with health-care shares among the biggest gainers. Crude gained after tumbling in New York Monday even though President Donald Trump spoke with Russia’s Vladimir Putin about falling oil prices. The 10-year Treasury yield rose, while gold dipped. S&P 500 futures rose 0.1% as of 8:06 a.m. in Tokyo. The S&P 500 Index climbed 3.4%. Nikkei 225 futures rose 2.7%. Australia’s S&P/ASX 200 Index added 1%. Hong Kong’s Hang Seng Index contracts climbed 1.7%.  

• Oil Sell-Off Pauses as Market Grapples With Supply-Demand Shock.  

• Five Things You Need to Know to Start Your Day.

• U.S. Jobless Soar, Australia Slump, Supply-Chain Sages: Eco Day.  

• Visa Says Consumer Spending Has ‘Sharply Declined,’ Even Online.  

• Bacon Left Out of Surge Beef and Eggs Are Getting From Lockdowns.  

• Millions More Jobless Claims to Show Reeling U.S. Economy.

Wall Street Journal: 

• How Coronavirus Invaded a New York Community: ‘We Weren’t Expecting It to Be Ground Zero’.

• Nurses Are the Coronavirus Heroes.

• Coronavirus Models of Uncertainty.

• The Fed Transformed: Powell Leads Central Bank Into Uncharted Waters.

• U.S. Extends Shutdowns as Virus Strains Hospitals.

• DOJ Investigating Lawmakers for Possible Insider Trading.

CNBC.com:   

• Moody’s cuts outlook on $6.6 trillion US corporate debt pile to ‘negative’.

• Microsoft jumps 7% as cloud services see pickup.

• Ford, GE plan to produce 50,000 ventilators in 100 days.

• Coronavirus job losses could total 47 million, unemployment rate may hit 32%, Fed estimates.

• Cramer: Science can stop economy from entering ‘coronavirus-induced depression’

• Stocks making the biggest moves after hours: RH, Domino’s Pizza, Marathon Oil & more.

• Coronavirus live updates: USNS Comfort’s arrival draws crowds, CA has ordered over 100 million N95 masks.

• Kohl’s will furlough about 85,000 employees, Macy’s furloughs majority as retailers cope with significant sales losses.

• Oil drops more than 6% to 18-year low as global demand evaporates.

• 6 promising Nasdaq-100 companies that are leading the way for technological and financial innovation.

Fox News:

• Trump shows off new rapid coronavirus test kit in Rose Garden, as HHS announces milestone of tests.

• Coronavirus causing rise in relapses among people recovering, expert says.

• Rising virus numbers in these states are cause for concern, Harvard official says.

Zero Hedge:

• Tent Hospital Erected In Central Park As Hospital Ship Arrives In New York City.

• Energy Collapse, Earnings Ennui, & Consumer Credit Cracks.

• Fed's Kashkari Goes Full-On God-Complex, Lectures "This Is Not The Time To Worry About Moral Hazard".

• IV Vitamin C "Widely Used" To Treat COVID-19 In NY Hospitals.

• "This Will Be A Tsunami" - America Has A New Problem: How To Give Away $2 Trillion In 2 Weeks.

• One Oilman's Plea To President Trump.

• Retailers Prepare For Civil Unrest; Boarded-Up Stores Seen From SoHo To Beverly Hills.

• In Late February, Nancy Pelosi Encouraged Large Groups To Congregate In Chinatown.

• Second US Aircraft Carrier Is Facing A COVID-19 Outbreak Among Crew.

• Mortgage Lenders Demand Fed Bailout... After Blaming Fed For Forcing "Staggering, Unprecedented" Margin Calls.

• Stocks Bid Into Month-End Despite Americans' Unprecedented Cash-Hoarding.

Business Insider: 

• Ford will make 50,000 ventilators in the next 100 days to meet critical coronavirus pandemic demand.

• Wuhan's death toll could be astronomically higher than the Chinese government has reported, some residents say.

• Billionaire David Geffen deleted his Instagram after being slammed for a post about how he's self-isolating on his $590 million superyacht.

• Leaked memo from Delta reveals plans to cut worker hours and pay, despite protections in the coronavirus stimulus package. United and other airlines are doing the same.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Google Docs:

• Coronavirus Testing by State.

Night Trading 

• Asian equity indices are +1.75% to +2.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 144.25 +3.25 basis points.

• China Sovereign CDS 59.0 +6.0 basis points.

• Bloomberg Emerging Markets Currency Index  58.51 -.02%.

• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.39%.

• NASDAQ 100 futures +.47%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CAG)/.49

• (CONN)/.35

• (FLR)/.13

• (MKC)/1.03

• (REV)/-1.08

After the Close:

• (BB)/.04

• (CRON)/.04

• (VRNT)/1.16

Economic Releases 
9:00 am EST

• The S&P CoreLogic CS 20-City MoM for Jan. is estimated to rise +.4% versus a +.43% gain in Dec.
  

9:45 am EST

• The MNI Chicago PMI for March is estimated to fall to 40.0 versus 49.0 in Feb.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for March is estimated to fall to 110.0 versus 130.7 in Feb.

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Unemployment Rate report, Eurozone CPI report, US weekly retail sales reports, (EPD) analyst day, (TSEM) online investor conference, (BKD) investor day and the (PFE) investor day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 50% net long heading into the day.

Stocks Surging into Final Hour on Coronavirus Peak Hopes, Global Stimulus, End-of-Quarter Window-Dressing, Tech/Pharma Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 59.0 -10.0%

• Euro/Yen Carry Return Index 123.62 -.96%

• Emerging Markets Currency Volatility(VXY) 12.83 +1.23%

• S&P 500 Implied Correlation 75.5 +2.1%

• ISE Sentiment Index 100.0 unch.
  

• Total Put/Call 1.12 +5.7%

• NYSE Arms 1.60 -9.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 111.34 +3.17%
  

• America Energy Sector High-Yield CDS Index 1,227.0 -8.97%

• European Financial Sector CDS Index 118.47 +5.69%

• Italian/German 10Y Yld Spread 197.25 +17.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 146.31 +6.7%
  

• Emerging Market CDS Index 357.79 +4.98%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.69 -2.5%

• 2-Year Swap Spread 27.0 +1.5 basis points

• TED Spread 149.0 +7.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 28.25 +4.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.45 -1.07%
• 3-Month T-Bill Yield .02% +6.0 basis points

• Yield Curve .45 -3.0 basis points

• China Iron Ore Spot 80.55 USD/Metric Tonne -3.79%

• Citi US Economic Surprise Index -1.5 -.2 point

• Citi Eurozone Economic Surprise Index -41.60 +16.1 points

• Citi Emerging Markets Economic Surprise Index -24.8 -.6 point

• 10-Year TIPS Spread .95 -1.0 basis point
• n/a chance of no change at April 29th meeting, n/a chance of no change at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +111 open in Japan 
• China A50 Futures: Indicating -10 open in China

• DAX Futures: Indicating -39 open in Germany

Portfolio:

• Higher: On gains in my consumer staple/tech/biotech/industrial sector longs

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

• Market Exposure: Moved to 75% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +35.8% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 46.9% of Issues Advancing, 51.8% Declining
• 4 New 52-Week Highs, 43 New Lows
• 3.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.6%
• Vix 60.9 -7.1%
• Total Put/Call 1.0 -5.7%
• TRIN/Arms 1.40 -21.4%