Stocks Modestly Higher into Final Hour on Oil Gain, Short-Covering, Less Emerging Markets Debt Angst, Biotech/Energy Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 53.6 -6.0%

• Euro/Yen Carry Return Index 121.36 -.60%

• Emerging Markets Currency Volatility(VXY) 12.73 +2.0%

• S&P 500 Implied Correlation 79.16 -4.8%

• ISE Sentiment Index 87.0 +12.0 points
  

• Total Put/Call 1.23 +3.4%

• NYSE Arms .85 -27.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 124.44 +.9%
  

• America Energy Sector High-Yield CDS Index 1,439.0 +3.84%

• European Financial Sector CDS Index 125.14 -.21%

• Italian/German 10Y Yld Spread 190.0 -6.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 151.0 +3.33%
  

• Emerging Market CDS Index 371.94 -3.21%
  

• iBoxx Offshore RMB China Corporate High Yield Index 164.72 -.23%

• 2-Year Swap Spread 24.0 -1.0 basis point

• TED Spread 139.0 +3.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 63.75 +8.75 basis points
• MBS  5/10 Treasury Spread  131.0 -6.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.92 -.03%
• 3-Month T-Bill Yield .07% +2.0 basis points

• Yield Curve .39 -1.0 basis point

• China Iron Ore Spot 80.59 USD/Metric Tonne +3.29%

• Citi US Economic Surprise Index -31.1 -55.9 points

• Citi Eurozone Economic Surprise Index -46.10 -4.5 points

• Citi Emerging Markets Economic Surprise Index -3.6 -3.6 points

• 10-Year TIPS Spread 1.02 +7.0 basis points
• 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 +233 open in Japan 
• China A50 Futures: Indicating -160 open in China

• DAX Futures: Indicating -90 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer staple/medical/biotech sector longs and index hedges

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value -.1%

Sector Underperformers:

• 1) Shipping -4.7% 2) Homebuilding -3.1% 3) Airlines -2.8%

Stocks Falling on Unusual Volume: 

• QDEL, CRNC, KREF, NNN, UAL, AAL, BA, KSS, CVS, INSW, HUBS, CAKE, WBA, AAP, RPD, DIN, WEN, STZ, LGIH, EAT, LAMR, ERI, OSUR and ZM

Stocks With Unusual Put Option Activity:

• 1) VWO 2) XRT 3) COP 4) DG 5) PXD

Stocks With Most Negative News Mentions:

• 1) LK 2) GMLP 3) STZ 4) LEN 5) ALV

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.8%

Sector Outperformers:

• 1) Energy +7.0% 2) Oil Service +5.6% 3) Gold & Silver +5.0%

Stocks Rising on Unusual Volume:

• OXY, FANG, HESM, OKE, ASIX, SLB, APOG, EOG, CVX, PXD, XRX, TDG, XOM, RNG, CLH, PRFT and BKE

Stocks With Unusual Call Option Activity:

• 1) TMUS 2) APA 3) UCO 4) PXD 5) APC

Stocks With Most Positive News Mentions:

• 1) APA 2) HAE 3) APOG 4) BMRA 5) KEX

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +59.4% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 64.8% of Issues Advancing, 34.1% Declining
• 2 New 52-Week Highs, 63 New Lows
• 3.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.3%
• Vix 53.3 -6.7%
• Total Put/Call 1.22 +2.5%
• TRIN/Arms .75 -35.9%

Thursday Watch

Evening Headlines

Bloomberg:                

• China Concealed Extent of Virus Outbreak, U.S. Intelligence Says.

• U.S. Seeks Body Bags; China Hid Outbreak Extent: Virus Update.  

• China-Focused Hedge Funds Risk a Wave of Redemptions.

• Trump Says He’s Looking at Hazard Pay for Health-Care Workers.  

• The European Mayor Who Doesn’t Want China’s Help With Virus.

• EU Countries Urge Emergency Restraint After Orban’s Power Grab.

• Asian Stocks Decline; U.S. Equity Futures Rise. Stocks in Asia fell, though losses were shallower than those on Wall Street overnight, as investors continue to gauge the impact of the stringent measures being used to contain the coronavirus. Japanese shares opened lower with more modest declines in South Korea, while the Sydney market lost more than 2%. Futures on the S&P 500 advanced about 1% after the index on Tuesday tumbled again. In the latest virus developments, France and Spain reported another increase in fatalities, while Italy and Germany moved to extend lockdown measures and Florida ordered people to stay home. New York Governor Andrew Cuomo said a model showed the Covid-19 outbreak may not peak in the state until the end of April. S&P 500 futures rose 1.1% as of 9:05 a.m. in Tokyo. The S&P 500 fell 4.4%. Japan’s Topix index lost 0.7%. South Korea’s Kospi index added 0.4%. Australia’s S&P/ASX 200 Index slid 2%.    

• Overflowing Oil Tanks Have Traders Eyeing Rail Cars for Storage .

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

• Next Stop Financial Crisis, Dire Trump, Japan Reinvents: Eco Day.

• FTC Sues to Unwind Altria’s $12.8 Billion Investment in Juul.  

• Many New York Coronavirus Patients Are Young, Surprising Doctors.  

• V, L or ‘Nike Swoosh’? Economists Debate Shape of Global Recovery.

Wall Street Journal:

• Treasury Department Selects Wall Street Banks to Advise on Airline Aid.

• Italy’s Coronavirus Death Toll Is Far Higher Than Reported.

• New York Neighborhoods With the Most Coronavirus Cases.

• Hospitals, Doctors Feel Financial Squeeze of Coronavirus Crisis.

• Companies Hit Hard by Coronavirus Look to Cut 401(k) Contributions.

• A Wuhan Writer Takes On China’s Communist Machine.

CNBC.com:    

• Dow falls 900 points as Wall Street fears coronavirus will shut down economy longer than expected.

• Stocks making the biggest moves after hours: PVH, Royal Caribbean, AMC & more.

• Trump considering halting US flights between coronavirus ‘hot spots’.

• Coronavirus live updates: US cases top 200,000, Georgia issues ‘shelter-in-place’ order.

• White House advisor Fauci says coronavirus vaccine trial is on target and will be ‘ultimate game changer’.

• Politicians are already calling for a 4th coronavirus relief plan. Here’s what could be in it.

• NY lawmakers, unions urge Jeff Bezos to close Amazon warehouses hit by coronavirus.

Fox News:

• Trump says he can't confirm Beijing government's coronavirus numbers amid claims of underreporting.

• What to know about zinc supplements in coronavirus fight.

MarketWatch.com:         

• Zoom(ZM), Microsoft(MSFT) Teams usage are rocketing during coronavirus pandemic, new data show.

• Game on: Esports has filled the void of empty stadiums and arenas.

• These mortgage borrowers will be ‘the first canary in the coal mine’ for a coronavirus-fueled foreclosure crisis, regulator says.

• Coronavirus has sparked a surge in gun sales not seen since Sandy Hook.

• American businesses are tapping their credit lines at the fastest pace ever.

Zero Hedge:

• "One Of The Worst Coverups In Human History": MSM Attention Turns To Chinese Biolab Near COVID-19 Ground Zero.

• Eight Registered Sex Offenders Released From NY Jail Due To Gov. Cuomo's Statewide COVID-19 Orders.

• Here We Go Again: China Puts County On Lockdown After New Corona Cluster Emerges.

• Japanese VP: The WHO Should Be Renamed The "Chinese Health Organization".

• 'Disappeared' Wuhan Whistleblower Doc Suddenly Sends Cryptic Message.

• Study Finds That Trump's 'Miracle Drug' Helps Fight COVID-19.

• Michigan Democrat Governor Begs Feds For Hydroxychloroquine Just Days After Threatening Doctors For Prescribing It.

• In Groundbreaking Move, Fed Excludes Treasurys From Leverage Ratio Rule: Here's What That Means.

• $81 Billion In Rent Is Due Today And No One Knows What Will Happen.

• April Fool'd - Stocks Suffer Worst Start To A Quarter Since Great Depression.

Business Insider:  

• The US intelligence community has reportedly concluded that China intentionally misrepresented its coronavirus numbers.

• A quick finger-prick blood test can determine whether you've ever had the coronavirus. It could be widely available within weeks.

• Travel demand won't return to normal until mid-2021, even in the best-case scenario, an analyst warns.

• The WHO is recommending video games as an effective way to stop the spread of COVID-19, one year after adding 'gaming disorder' to its list of addictive behaviors.

• McDonald's is rolling out wellness checks to more than 800,000 workers and plans to start taking their temperatures amid the coronavirus outbreak.

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 -2.0% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 154.0 +15.25 basis points.

• China Sovereign CDS 59.75 +6.75 basis points.

• Bloomberg Emerging Markets Currency Index 57.87 -.11%.

• Euro Stoxx 50 futures -1.25%.

• S&P 500 futures +.59%.

• NASDAQ 100 futures +.4%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AYI)/1.90

• (APOG)/.35

• (KMX)/1.13

• (CCL)/-1.27

• (SCHN)/.24

• (WBA)/1.46

After the Close:

• (CHWY)/-.12

• (PLAY)/.71

• (RECN)/.08

Economic Releases 
7:30 am EST

• Challenger Job Cuts YoY for March.
  

8:30 am EST

• The Trade Balance for Feb. is estimated at -$40.0B versus -$45.3B in Jan.

• Initial Jobless Claims for last week are estimated to rise to 3600K versus 3283K the prior week.

• Continuing Claims are estimated to rise to 3600K versus 3283K prior.
  

10:00 am EST

• Factory Orders for Feb. is estimated to rise +.2% versus a -.5% decline in Jan. 
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PPI report, weekly Bloomberg Consumer Comfort Index report, weekly EIA natural gas inventory report and the (BMY) investor day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by financial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.