Tuesday, February 28, 2023

Wednesday Watch

Night Trading 

  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 115.0 -.5 basis point. 
  • China Sovereign CDS 71.0 +1.0 basis point. 
  • China Iron Ore Spot 124.8 USD/Metric Tonne +.57%.
  • Bloomberg Emerging Markets Currency Index 47.5 +.06%.
  • Bloomberg Global Risk-On/Risk Off Index  62.9 +.6%. 
  • Bloomberg US Financial Conditions Index .20 +2.0 basis points.
  • Volatility Index(VIX) futures 21.9 +.8%.
  • Euro Stoxx 50 futures -.28%.
  • S&P 500 futures -.20%.
  • NASDAQ 100 futures -.3%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and industrial 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.

Stocks Reversing Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Dollar Strength, Energy/Healthcare Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Mixed
  • Volume:  Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 20.2 -3.4%
  • DJIA Intraday % Swing .59%
  • Bloomberg Global Risk On/Risk Off Index 62.9 +.3%
  • Euro/Yen Carry Return Index 149.9 -.3%
  • Emerging Markets Currency Volatility(VXY) 10.6 -3.1%
  • CBOE S&P 500 Implied Correlation Index 34.6 -2.8% 
  • ISE Sentiment Index 103.0 -2.0 points
  • Total Put/Call .97 -5.8%
  • NYSE Arms 1.01 -28.9%
Credit Investor Angst:
  • North American Investment Grade CDS Index 75.45 -.35%
  • US Energy High-Yield OAS 359.72 -1.34%
  • Bloomberg TRACE # Distressed Bonds Traded 294.0 +3
  • European Financial Sector CDS Index 88.3 +.21% 
  • Credit Suisse Subordinated 5Y Credit Default Swap 403.4 +.1%
  • Italian/German 10Y Yld Spread 183.0 basis basis points -1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 115.8 -1.1%
  • Emerging Market CDS Index 239.0 -.12%
  • China Corp. High-Yield Bond USD ETF(KHYB) 27.2 +.03%
  • 2-Year Swap Spread 36.0 basis points +1.0 basis point
  • TED Spread 16.5 basis points -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -9.0 -.25 basis point
  • MBS  5/10 Treasury Spread  148.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 525.0 +9.0 basis points
  • Avg. Auto ABS OAS 60.0 +2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 47.4 -.09%
  • 3-Month T-Bill Yield 4.80% +3.0 basis points
  • China Iron Ore Spot 124.6 USD/Metric Tonne +.4%
  • Dutch TTF Nat Gas(European benchmark) 46.7 euros/megawatt-hour -1.6%
  • Citi US Economic Surprise Index 38.6 -1.8 points
  • Citi Eurozone Economic Surprise Index 61.8 +1.3 points
  • Citi Emerging Markets Economic Surprise Index 2.4 +.2 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.8 +.73:  Growth Rate +1.1% +.4 percentage point, P/E 17.7 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.37% -1.0 basis point
  • Bloomberg US Financial Conditions Index .19 -2.0 basis points
  • Yield Curve -88.25 basis points (2s/10s) -1.5 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +2.80% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.21% -2.0 basis points
  • 10-Year TIPS Spread 2.42 +5.0 basis points
  • Highest target rate probability for May 3rd FOMC meeting: 73.2%(+2.0 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 59.6%(+3.1 percentage points) chance of 5.25%-5.5%.
US Covid-19:
  • 84 new infections/100K people(last 7 days total). 4.8%(-0.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -83.3%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating -1 open in Japan 
  • China A50 Futures: Indicating -4 open in China
  • DAX Futures: Indicating +7 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial/tech/medical sector longs and emerging market shorts
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Value +.1%
Sector Underperformers:
  • 1) Energy -1.4% 2) Healthcare Providers -1.2% 3) Telecom -.6%
Stocks Falling on Unusual Volume: 
  • HEI/A, PBR, DK, LYTS, BMRN, AVTA, ZETA, ALC, SGRY, BNS, EHC, OVV, DAR, TCPC, DISH, ACHC, EBS, UHS, AMRC, NCLH, TASK, NFE, NEWT, EVER, TWI, TPIC, OMI and AHCO
Stocks With Unusual Put Option Activity:
  • 1) INVH 2) NRG 3) NATI 4) HPQ 5) DISH
Stocks With Most Negative News Mentions:
  • 1) DISH 2) AHCO 3) NCLH 4) CVEO 5) APTX
Charts:

Bull Radar

Style Outperformer:

  • Small-Cap Growth +.9%
Sector Outperformers:
  • Steel +1.6% 2) Gambling +1.6% 3) Gold & Silver +1.2%
Stocks Rising on Unusual Volume:
  • PGNY, KTB, HIMS, CDNA, FOUR, RVMD, SKIN, ACAD, XRAY, RDNT, UVE, SKYT, PRIM, INSW, DUOL, KNTK, RELY, CIEN, TWLO, RETA, AAP, GRBK, ROCC and TGT
Stocks With Unusual Call Option Activity:
  • 1) MRNS 2) RITM 3) NOV 4) WWE 5) CLNE
Stocks With Most Positive News Mentions:
  • 1) CHS 2) VTNR 3) FOUR 4) HIMS 5) HY

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

Earnings of Note 
Company/Estimate 

Before the Open: 
  • (ANF)/.86
  • (DLTR)/2.00
  • (DCI)/.68
  • (DY)/.14
  • (FSS)/.56
  • (HGV)/.77
  • (JACK)/1.74
  • (KSS)/.97
  • (LOW)/2.21
  • (RY)/2.93
  • (TUP)/.29
  • (WB)/.53
  • (WEN)/.21
After the Close:
  • (BOX)/.34
  • (JAZZ)/1.12
  • (OKTA)/.09
  • (PLUG)/-.25
  • (MDRX)/.28
  • (AAN)/.01
  • (SNOW)/.05
  • (CRM)/1.36
  • (SPLK)/1.15

Economic Releases 

10:00 am EST
  • Construction Spending MoM for Jan. is estimated to rise +.2% versus a -.4% decline in Dec.
  • ISM Manufacturing for Feb. is estimated to rise to 48.0 versus 47.4 in Dec.
  • ISM Prices Paid for Feb. is estimated to rise to 45.0 versus 44.5 in Dec.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory  gain of +1,351,570 barrels versus a +7,647,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -207,140 barrels versus a -1,856,000 barrel decline the prior week. Distillate inventories are estimated to fall by -68,140 barrels versus a +2,698,000 barrel gain the prior week.  Finally, Refinery Utilization is estimated to fall by -.14% versus a -.6% decline prior.
Afternoon
  • Wards Total Vehicle Sales for Feb. is estimated to fall to 14.7M versus 15.74M in Jan.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Kashkari speaking, China Services PMI report, weekly MBA mortgage applications report, (TSLA) investor day, Bernstein Tech/Media/Telecom/Consumer Conference, Citi Healthcare Services/Medtech/Tools/HCIT Conference and the BofA Ag/Materials Conference could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (SIG)/1.49
  • (TTC)/1.52
After the Close: 
  • (DOCU)/.56
  • (MTN)/8.81
Economic Releases  
8:30 am EST
  • Initial Jobless Claims for last week are estimated to rise to 235K versus 232K the prior week.
  • Continuing Claims are estimated to rise to 1802K versus 1795K prior.
10:00 am EST
  • Wholesale Trade Sales MoM for April is estimated to rise +.2% versus a +.4% gain in March.

12:00 pm EST

  • Household Change in Net Worth for 1Q.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The Eurozone GDP report, weekly EIA natural gas inventory report, (TD) investor day and the (PYPL) management meeting 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 -7.3% Below 100-Day Average 
  • 5 Sectors Declining, 6 Sectors Rising
  • 61.3% of Issues Advancing, 35.2% Declining
  • 53 New 52-Week Highs, 23 New Lows
  • 54.3%(+.8%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 41.0 -1.0
  • Bloomberg Global Risk-On/Risk-Off Index 62.8 +.1%
  • Russell 1000: Growth/Value 14,894.6 -.02%
  • Vix 20.4 -2.5%
  • Total Put/Call .95 -7.8%
  • TRIN/Arms 1.02 -28.2%

Monday, February 27, 2023

Tuesday Watch

Night Trading 

  • Asian equity indices are unch. to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 115.5 -3.25 basis points. 
  • China Sovereign CDS 70.0 -1.75 basis points. 
  • China Iron Ore Spot 123.0 USD/Metric Tonne +1.0%.
  • Bloomberg Emerging Markets Currency Index 47.5 -.01%.
  • Bloomberg Global Risk-On/Risk Off Index  62.9 +.3%. 
  • Bloomberg US Financial Conditions Index .17 -2.0 basis points.
  • Volatility Index(VIX) futures 21.2 -.52%.
  • Euro Stoxx 50 futures +.19%.
  • S&P 500 futures +.20%.
  • NASDAQ 100 futures +.33%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by tech and industrial 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 Modestly Higher into Final Hour on Stable Long-Term Rates, Dollar Weakness, Month-End Positioning, Commodity/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume:  Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 20.9 -3.6%
  • DJIA Intraday % Swing 1.02%
  • Bloomberg Global Risk On/Risk Off Index 62.5 +3.1%
  • Euro/Yen Carry Return Index 150.3 +.3%
  • Emerging Markets Currency Volatility(VXY) 10.9 -.1%
  • CBOE S&P 500 Implied Correlation Index 36.2 -4.7% 
  • ISE Sentiment Index 112.0 +26.0 points
  • Total Put/Call 1.02 -7.3%
  • NYSE Arms 1.13 +34.5%
Credit Investor Angst:
  • North American Investment Grade CDS Index 75.4 -1.5%
  • US Energy High-Yield OAS 364.3 -2.2%
  • Bloomberg TRACE # Distressed Bonds Traded 291.0 -10
  • European Financial Sector CDS Index 88.1 -2.3% 
  • Credit Suisse Subordinated 5Y Credit Default Swap 404.91 -.5%
  • Italian/German 10Y Yld Spread 184.0 basis basis points -6.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 117.2 -.5%
  • Emerging Market CDS Index 238.8 -2.2%
  • China Corp. High-Yield Bond USD ETF(KHYB) 27.2 +.44%
  • 2-Year Swap Spread 35.0 basis points +1.0 basis point
  • TED Spread 17.25 basis points +2.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -.75 basis point
  • MBS  5/10 Treasury Spread  147.0 -6.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 516.0 +3.0 basis points
  • Avg. Auto ABS OAS 58.0 -3.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 47.5 +.12%
  • 3-Month T-Bill Yield 4.77% -4.0 basis points
  • China Iron Ore Spot 123.6 USD/Metric Tonne +.7%
  • Dutch TTF Nat Gas(European benchmark) 47.3 euros/megawatt-hour -7.3%
  • Citi US Economic Surprise Index 40.4 +2.9 points
  • Citi Eurozone Economic Surprise Index 60.5 -8.2 points
  • Citi Emerging Markets Economic Surprise Index 2.2 -.3 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.07 +.10:  Growth Rate +.7% +.4 percentage point, P/E 17.8+.1
  • S&P 500 Current Year Estimated Profit Margin 12.38% -1.0 basis point
  • Bloomberg US Financial Conditions Index .21 -5.0 basis points
  • Yield Curve -86.75 basis points (2s/10s) -.75 basis point
  • US Atlanta Fed 1Q GDPNow Forecast +2.80% +5.0 basis points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.23% unch.
  • 10-Year TIPS Spread 2.37 -1.0 basis point
  • Highest target rate probability for May 3rd FOMC meeting: 71.0%(+1.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 56.9%(+.1 percentage point) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +92 open in Japan 
  • China A50 Futures: Indicating +37 open in China
  • DAX Futures: Indicating +33 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial/tech/commodity sector longs
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Value +.1%
Sector Underperformers:
  • 1) Education -.6% 2) Telecom -.5% 3) Utilities -.2%
Stocks Falling on Unusual Volume: 
  • SKYW, XP, PODD, SRPT, TMDX, MAX, NABL, ITRI, COUR, DH, OSW, ACMR, RRC, RC, TREE, TGNA and RETA
Stocks With Unusual Put Option Activity:
  • 1) AAP 2) WDAY 3) FUBO 4) VMW 5) SAVE
Stocks With Most Negative News Mentions:
  • 1) RETA 2) RRC 3) FUBO 4) AMWL 5) BBY
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Growth +.8%
Sector Outperformers:
  • Road & Rail +3.4% 2) Alt Energy +2.4% 3) AI/Robotics +1.5%
Stocks Rising on Unusual Volume:
  • UVE, SGEN, CLDX, SYNH, UNP, VICR, REPL, SJT, INGN, ZETA, ATSG, FOXF and FOCS
Stocks With Unusual Call Option Activity:
  • 1) IEI 2) WM 3) CHGG 4) URA 5) MBI
Stocks With Most Positive News Mentions:
  • 1) SGEN 2) UNP 3) KOS 4) OPRA 5) CLDX

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

Earnings of Note 
Company/Estimate 

Before the Open: 
  • (AAP)/2.42
  • (AMWD)/1.78
  • (AZO)/21.91
  • (CBRL)/1.36
  • (FRO)/1.03
  • (IGT)/.36
  • (SJM)/2.13
  • (JLL)/4.59
  • (NCLH)/-.84
  • (PRGO)/.71
  • (TGT)/1.40
  • (WRBY)/.00
After the Close:
  • (DDD)/-.08
  • (A)/1.31
  • (AMBA)/.15
  • (AMC)/-.21
  • (BLNK)/-.46
  • (CPNG)/.05
  • (FSLR)/-.15
  • (GDRX)/-.01
  • (HPQ)/.75
  • (MNST)/.63
  • (MYGN)/-.17
  • (NVAX)/-1.05
  • (ROST)/1.23
  • (URBN)/.38

Economic Releases 

8:30 am EST
  • Advance Goods Trade Deficit for Jan. is estimated at -$91.0B versus -$89.7B in Dec.
  • Wholesale Inventories MoM for Jan. is estimated to rise +.2% versus a +.1% gain in Dec.
  • Retail Inventories MoM for Jan. is estimated to rise +.1% versus a +.5% gain in Dec.
9:00 am EST
  • The 4Q House Price Purchase Index QoQ.
  • The FHFA Houses Price Index MoM for Dec. is estimated to fall -.2% versus a -.1% decline in Nov.
  • The S&P CoreLogic CS 20-City MoM SA for Dec. is estimated to fall -.4% versus a -.54% in Nov.
9:45 am EST
  • The MNI Chicago PMI for Feb. is estimated to rise to 45.5 versus 44.3 in Jan.
10:00 am EST
  • The Richmond Fed Manufacturing Index for Feb. is estimated to rise to -5.0 versus -11.0 in Jan.
  • The Conference Board Consumer Confidence Index for Feb. is estimated to rise to 108.5 versus 107.1 in Jan.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Australia Current Account Balance report, weekly US retail sales reports, Keefe Bruyette Woods Payments Finance/Tech Conference, (CVX) investor day, (GS) investor day, (PRGO) investor day, (PGR) 4Q investor call and the BofA Power/Utilities/Clean Energy 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 -9.1% Below 100-Day Average 
  • 1 Sector Declining, 10 Sectors Rising
  • 70.2% of Issues Advancing, 26.6% Declining
  • 50 New 52-Week Highs, 12 New Lows
  • 55.9%(+4.4%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 42.0 +6.0
  • Bloomberg Global Risk-On/Risk-Off Index 61.8 +1.9%
  • Russell 1000: Growth/Value 14,850.5 +.35%
  • Vix 21.3 -1.9%
  • Total Put/Call 1.05 -4.6%
  • TRIN/Arms 1.20 +42.9%

Sunday, February 26, 2023

Monday Watch

Today's Headlines

Bloomberg:                                        
Wall Street Journal:
Fox News:
CNBC:
Zero Hedge:    
TheGatewayPundit.com: 
Twitter:
OpenVAERS:
SKirsch.com:
Night Trading
  • Asian indices are -1.0% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 118.75 +3.0 basis points.
  • China Sovereign CDS 71.75 +4.25 basis points.
  • China Iron Ore Spot 125.5 USD/Metric Tonne -1.0%
  • Bloomberg Emerging Markets Currency Index 47.4 -.02%.
  • Bloomberg Global Risk-On/Risk Off Index 60.7 +.07%.
  • Bloomberg US Financial Conditions Index .18 -8.0 basis points. 
  • Volatility Index(VIX) futures 22.0 -.71%. 
  • Euro Stoxx 50 futures +.24%.
  • S&P 500 futures +.25%.
  • NASDAQ 100 futures +.39%.

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and commodity 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 week.