Thursday, March 31, 2022

Stocks Falling into Afternoon on Diminished Russia/Ukraine Ceasefire Hopes, US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Consumer Discretionary/Financial Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line:  Lower
  • Sector Performance:  Mixed
  • Volume:  Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 20.2 +4.4%
  • Bloomberg Global Risk On/Risk Off Index 4,275.0 -301.0 points
  • Euro/Yen Carry Return Index 138.83 -.9%
  • Emerging Markets Currency Volatility(VXY) 11.6 -3.5%
  • CBOE S&P 500 Implied Correlation Index 37.0 +7.1% 
  • ISE Sentiment Index 89.0 -10.0 points
  • Total Put/Call .91 +7.1%
  • NYSE Arms 1.8 +43.9%
Credit Investor Angst:
  • North American Investment Grade CDS Index 66.39 +.34%
  • US Energy High-Yield OAS 358.11 -.28%
  • European Financial Sector CDS Index 80.93 -.52%
  • Italian/German 10Y Yld Spread 149.0 +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 100.7 +1..6%
  • Emerging Market CDS Index 227.64 +.85%
  • China Corp. High-Yield Bond USD ETF(KHYB) 29.68 +1.17% 
  • Ukraine Sovereign Debt Credit Default Swap 2,792.09 +3.1%
  • 2-Year Swap Spread 21.25 +.25 basis point
  • TED Spread 50.0 +6.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -21.75 +1.0 basis points
  • MBS  5/10 Treasury Spread  110.0 +1.0 basis point
  • iShares CMBS ETF 49.89 +.12%
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 53.76 +.07%
  • 3-Month T-Bill Yield .50% -2.0 basis points
  • Yield Curve 2.0 -.5 basis point
  • China Iron Ore Spot 161.4 USD/Metric Tonne +.4%
  • Citi US Economic Surprise Index 55.4 -3.7 points
  • Citi Eurozone Economic Surprise Index 44.8 -.2 point
  • Citi Emerging Markets Economic Surprise Index 39.4 -.5 point
  • 10-Year TIPS Spread 2.90 +1.0 basis point
  • 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting
US Covid-19:
  • 63 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak +1/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -92.7%(-.1 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating -121 open in Japan 
  • China A50 Futures: Indicating -73 open in China
  • DAX Futures: Indicating -14 open in Germany
Portfolio:
  • Slightly Higher: On gains in my commodity/medical sector longs, index hedges and emerging market shorts
  • Disclosed Trades:  None
  • Market Exposure:  50% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth -.6%
Sector Underperformers:
  • 1) Homebuilding -2.4% 2) Retail -2.0% 3) Computer Hardware -2.0%
Stocks Falling on Unusual Volume: 
  • LPX, SNBR, DHI, TPX, AMC, SWM, BROS, LEVI, BBY, SYNA, IEA, KRP, AMC, RCII, AN, GSHD, JELD, BRZE, MASI, THO, TREX, SAIA, GFS, WBA, IOT, DELL, HPQ, HYFM, HOOD, FND, PVH, CORT, CONN, AMD, PHR, AOSL, AMLX and PATH
Stocks With Unusual Put Option Activity:
  • 1) FISV 2) WBA 3) TPX 4) CZR 5) NLSN
Stocks With Most Negative News Mentions:
  • 1) AMD 2) AFIB 3) BIDU 4) MASI 5) FFIE
Charts:

Bull Radar

Style Outperformer:

  • Mid-Cap Value unch.
Sector Outperformers:
  • 1) Steel +1.2% 2) Airlines +1.1% 3) Shipping +.8%
Stocks Rising on Unusual Volume:
  • VGR, CG, CALM, CUTR, BJRI and PRG
Stocks With Unusual Call Option Activity:
  • 1) CLVS 2) FLEX 3) SPTN 4) SWCH 5) HEAR
Stocks With Most Positive News Mentions:
  • 1) VGR 2) ICVX 3) AMPG 4) CRNX 5) DTST

Mid-Day Market Internals

NYSE Composite Index:

  • Volume Running -6.7% Below 100-Day Average 
  • 6 Sectors Rising, 5 Sectors Declining
  • 55.1% of Issues Advancing, 41.0% Declining
  • 103 New 52-Week Highs, 43 New Lows
  • 49.8% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 52.8% 
  • Bloomberg Global Risk-On/Risk-Off Index 4,291.0 -285.0 points
  • Russell 1000: Growth/Value 16,706 -.17%
  • Vix 20.3 +5.1%
  • Total Put/Call .92 +8.2%
  • TRIN/Arms 1.98 +61.0%

Wednesday, March 30, 2022

Thursday Watch

Evening Headlines

Bloomberg:         
Wall Street Journal:
Zero Hedge:
Newsmax: 
TheGatewayPundit.com: 
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 98.75 +1.5 basis points. 
  • China Sovereign CDS 59.0 +1.75 basis points.
  • Bloomberg Emerging Markets Currency Index 53.74 +.03%. 
  • Bloomberg Global Risk-On/Risk Off Index 4,507.0 -68.0 points.
  • Volatility Index(VIX) futures 21.9 -1.0%.
  • Euro Stoxx 50 futures +.57%.
  • S&P 500 futures +.32%.
  • NASDAQ 100 futures +.52%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (WBA)/1.39
After the Close:
  • (BB)/-.03
Economic Releases
7:30 am EST
  • Challenger Job Cuts YoY for March.
8:30 am EST
  • Personal Income for Feb. is estimated to rise +.5% versus unch. in Jan.
  • Personal Spending for Feb. is estimated to rise +.5% versus a +2.1% gain in Jan.
  • The PCE Core MoM for Feb. is estimated to rise +.4% versus a +.5% gain in Jan.
  • Initial Jobless Claims for last week are estimated to rise to 196K versus 187K the prior week.
  • Continuing Claims are estimated to fall to 1340K versus 1350K prior.
9:45 am EST
  • The MNI Chicago PMI for March is estimated to rise to 57.0 versus 56.3 in Feb.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China Non-Manufacturing PMI report, UK GDP report, EU Unemployment Rate, weekly EIA natural gas inventory report, (SPWR) analyst day and the BofA Energy/Utilities Conference could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer 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 Falling into Final Hour on Diminished Russia/Ukraine Ceasefire Hopes, US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Tech/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line:  Lower
  • Sector Performance:  Most Sectors Declining
  • Volume:  Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 19.3 +2.2%
  • Bloomberg Global Risk On/Risk Off Index 4,555.0 -40.0 points
  • Euro/Yen Carry Return Index 140.02 -.23%
  • Emerging Markets Currency Volatility(VXY) 12.0 -1.96%
  • CBOE S&P 500 Implied Correlation Index 35.0 +4.8% 
  • ISE Sentiment Index 105.0 +1.0 point
  • Total Put/Call .77 -17.2%
  • NYSE Arms 1.3 +27.2%
Credit Investor Angst:
  • North American Investment Grade CDS Index 67.28 -4.7%
  • US Energy High-Yield OAS 358.65 +.53%
  • European Financial Sector CDS Index 81.35 +1.3%
  • Italian/German 10Y Yld Spread 148.0 unch.
  • Asia Ex-Japan Investment Grade CDS Index 98.50 -3.6%
  • Emerging Market CDS Index 226.40 +3.6%
  • China Corp. High-Yield Bond USD ETF(KHYB) 29.4 -.20% 
  • Ukraine Sovereign Debt Credit Default Swap 2,708.35 +7.2%
  • 2-Year Swap Spread 21.0 +.75 basis point
  • TED Spread 44.5 +1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -22.75 -1.75 basis points
  • MBS  5/10 Treasury Spread  109.0 -3.0 basis points
  • iShares CMBS ETF 49.58 +.08%
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 53.68 +.39%
  • 3-Month T-Bill Yield .52% unch.
  • Yield Curve 2.5 -1.5 basis points
  • China Iron Ore Spot 160.6 USD/Metric Tonne +4.7%
  • Citi US Economic Surprise Index 59.1 -.4 point
  • Citi Eurozone Economic Surprise Index 45.0 +11.1 points
  • Citi Emerging Markets Economic Surprise Index 39.9 -.8 point
  • 10-Year TIPS Spread 2.89 +1.0 basis point
  • 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting
US Covid-19:
  • 62 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak -0/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -92.6%(unch.) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating -92 open in Japan 
  • China A50 Futures: Indicating -68 open in China
  • DAX Futures: Indicating -59 open in Germany
Portfolio:
  • Slightly Higher: On gains in my commodity sector longs and index hedges
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 50% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Value -.9%
Sector Underperformers:
  • 1) Retail -2.6% 2) Banks -2.1% 3) Semis -1.4%
Stocks Falling on Unusual Volume: 
  • QCOM, CRC, ZUO, UMPQ, MTDR, SCVL, LOW, IGMS, SAIA, HRI, JELD, FBP, FND, HOOD, FIVE, BLD, PBCT, W, MTB, PLCE, PVH, WSM, BGFV, NWN, CONN, SGHT, AMC, RCUS, CNXC, RH and CHWY
Stocks With Unusual Put Option Activity:
  • 1) REI 2) RH 3) IVV 4) INDA 5) KBE
Stocks With Most Negative News Mentions:
  • 1) SDIG 2) RH 3) AKBA 4) CHWY 5) GLOB
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Value -.2%
Sector Outperformers:
  • 1) Energy +1.6% 2) Shipping +1.4% 3) Agriculture +1.3%
Stocks Rising on Unusual Volume:
  • VIR, AMBC, LTHM, YETI, CALM, PLL, MLKN, MSM, AXSM, BROS, NEO, DICE, PINC, TVTY, QS, VIRT and AOSL
Stocks With Unusual Call Option Activity:
  • 1) RH 2) MBI 3) HMHC 4) PLAY 5) NLSN
Stocks With Most Positive News Mentions:
  • 1) VIR 2) LULU 3) NAT 4) SRAD 5) FRPT