Tuesday Watch

Night Trading 

• Asian equity indices are +.75% to +1.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 74.75 -1.75 basis points.
• China Sovereign CDS 43.0 -2.0 basis points.
• China Iron Ore Spot 104.3 USD/Metric Tonne -.4%. 
• Crude Oil 97.02/bbl. -2.1% 
• Gold 4,794.6 USD/t oz. +.6%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.70 -.02%.
• Bloomberg Emerging Markets Currency Index 35.8 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 112.1 +.5%
• US 10-Year Yield 4.28% -1.0 basis point.
• Japan 30-Year Yield 3.67% -5.0 basis points. 
• Volatility Index(VIX) futures 20.7 -.3%.
• Euro Stoxx 50 futures +.46%. 
• S&P 500 futures +.01%.
• NASDAQ 100 futures +.13%.

Morning Preview Links

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

Stocks Reversing Higher into Afternoon on Mideast War Resolution Hopes, Lower Long-Term Rates, Short-Covering, Tech/Biotech Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 55.0 -1.7%
• BofA Private Credit Proxy Index 73.0 +.7% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .22 -1.0 basis point
• BofA Global Financial Stress Indicator .12 -4.0 basis points
• European Financial Sector CDS Index 63.8 +.1%
• Emerging Market CDS Index 162.3 -1.6%
• Israel Sovereign CDS 73.2 -.7% 
• Bloomberg Global Trade Policy Uncertainty Index .5 -.1
• US Morning Consult Daily Consume Sentiment Index 88.0 -.5

• Citi US Economic Surprise Index 11.7 -3.2

• Citi Eurozone Economic Surprise Index -21.5 -1.1

• Citi Emerging Markets Economic Surprise Index 38.5 -4.6
• S&P 500 Current Quarter EPS Growth Rate YoY(18 of 500 reporting) +66.5% -14.8 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 338.15 +.73:  Growth Rate +21.8% +.3 percentage point, P/E 20.2 unch.
• S&P 500 Current Year Estimated Profit Margin 15.06% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +690.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 802.76 +2.28: Growth Rate +101.8% +.6 percentage point, P/E 18.7 +.2 
• Bloomberg US Financial Conditions Index .76 unch.
• US Yield Curve 51.75 basis points (2s/10s) +1.0 basis point
• Bloomberg Industrial Metal Index 176.8 +1.8%
• Dutch TTF Nat Gas(European benchmark) 45.6 euros/megawatt-hour +4.5% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 20.4% -.1 percentage point
• US Atlanta Fed GDPNow Q1 Forecast +1.3% unch.
• US 10-Year T-Note Yield 4.30% -2.0 basis points
• 1-Year TIPS Spread 3.56 +11.0 basis points

• Highest target rate probability for June 17th FOMC meeting: 97.9% (+1.8 percentage points) chance of 3.5%-3.75%. Highest target rate probability for July 29th meeting: 91.7%(-2.4 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +942 open in Japan 
• China A50 Futures: Indicating +38 open in China

• DAX Futures: Indicating +334 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/consumer discretionary/industrial/biotech sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.2%

Sector Underperformers:

• 1) Utilities -1.6% 2) Foods -1.2% 3) Airlines -.9%

Stocks Falling on Unusual Volume: 

• GIS, BLLN, BROS, LITE, AXTI, AWR, CWT, CAG, MPLT, ERAS, FAST, GFL and FBRX

Stocks With Unusual Put Option Activity:

• 1) EA 2) TECH 3) NUAI 4) NU 5) REPL

Stocks With Most Negative News Mentions:

• 1) REPL 2) FAST 3) GOSS 4) LULU 5) BBY

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) XLF 3) IGV 4) XLK 5) XLI

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.6%

Sector Outperformers:

• 1) Software +5.1% 2) Cyber Security +3.4% 3) Computer Hardware +3.2%

Stocks Rising on Unusual Volume:

• RVMD, SYRE, OPTX, SGML, CAR, TSSI, LEG, LPTH, ANRO, CRDO, ORCL, BRZE, ADPT, MRLN, ALAB, FICO, LWLG, NOK, NET, CRWV, SNOW, SAIL,L NBIS, TEAM, SNEX, SION, GLOB, BEAM, GWRE, FORM, DELL, QLYS, AMPX, IDYA, AEBI, DOCN, AESI, MARA, PENG, NAVN, KMX, DBVT, AXON, AKAM, VEEV, JKS, SSSS, DXYZ, PLTR, TRMD, APPN, FSLY, OKTA, ZS, LC, VOR, CNM, ADSK, BAP, DLO, MANE, HPQ, FLY, WPP, BETR, ECVT, ASND, FLOC and JBIO

Stocks With Unusual Call Option Activity:

• 1) TVTX 2) CZR 3) UMC 4) ERAS 5) DLO 

Stocks With Most Positive News Mentions:

• 1) ALMU 2) RVMD 3) TBRG 4) LEG 5) CRDO

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) DRAM 3) GRID 4) VDE 5) IXN

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (ACI)/.43
• (BLK)/11.64
• (KMX)/.23
• (C)/2.63
• (JNJ)/2.68
• (JPM)/5.45
• (WFC)/1.58 

After the Close: 

• None of note

Economic Releases 

6:00 am EST

• The NFIB Small Business Optimism Index for March is estimated to fall to 97.9 versus 98.8 in February.  

8:30 am EST

• PPI Final Demand MoM for March is estimated to rise +1.1% versus a +.7% gain in Feb.
• PPI Ex Food & Energy MoM for March is estimated to rise +.4% versus a +.5% gain in Feb. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Barr speaking, Fed's Barkin speaking, Fed's Collins speaking, Fed's Goolsbee speaking, weekly US retail sales reports, ADP weekly employment change, IEA Monthly report, IMF Meetings, API weekly crude oil stock report, (MCO) annual meeting, (BK) annual meeting and the Needham Tech/Media/Telecom Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -18.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.7 +.8
• 4 Sectors Rising, 7 Sectors Declining
• 43.8% of Issues Advancing, 53.5% Declining 
• TRIN/Arms .72 -43.8%
• Non-Block Money Flow -$158.2M
  
• 45 New 52-Week Highs, 25 New Lows
• 54.2% (-.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.3 -2.8

Polymarket: 

• How long will the DHS shutdown last? 70+ days 68.0% +4.0 percentage points
• Will China invade Taiwan by end of 2026? 9.0% unch.
• Israel x Hezbollah ceasefire by April 30th 26.0% -23.0 percentage points 
• US Invades Iran before 2027 38.0% +8.0 percentage points
• Trump announces end of military operations against Iran by April 30th 30.0% -25.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 111.3 +.6%
• Global Monitor Iran Instability Index 100.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 93.0% -1.0 percentage point
• US High-Yield Tech Sector OAS Index 523.25 +14.25 basis points
• Bloomberg Cyclicals/Defensives Index 254.7 +.9%
• Morgan Stanley Growth vs Value Index 138.7 +1.1%
• CNN Fear & Greed Index 39.0 (FEAR) +3.0
• 1-Day Vix 10.9 -42.6%
  
• Vix 19.9 +3.7%
  
• Total Put/Call .85 +6.3%