Thursday, January 27, 2022

Friday Watch

Evening Headlines

Bloomberg:      
Wall Street Journal:
Fox News:
CNBC.com:
Zero Hedge:
Newsmax:
TheGatewayPundit.com: 
The Epoch Times:
SKirsch.com:
Night Trading 
  • Asian equity indices are +.25% to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 90.5 +.5 basis point. 
  • China Sovereign CDS 49.5 +1.5 basis points.
  • Bloomberg Emerging Markets Currency Index 53.91 -.02%. 
  • Bloomberg Global Risk-On/Risk Off Index 2,481.0 -45.0 points.
  • Volatility Index(VIX) futures 27.99 -2.9%.
  • Euro Stoxx 50 futures +.01%.
  • S&P 500 futures +.56%.
  • NASDAQ 100 futures +1.07%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (ALV)/1.16
  • (BMI)/.46
  • (BAH)/.99
  • (CAT)/2.26
  • (CHTR)/7.13
  • (CVX)/3.13
  • (CHD)/.60
  • (CL)/.79
  • (GNTX)/.34
  • (LHX)/3.27
  • (LYB)/3.86
  • (PSX)/1.95
  • (VFC)/1.22
  • (WY)/.48
After the Close:
  • None of note
Economic Releases
8:30 am EST
  • The 4Q Employment Cost Index is estimated to rise +1.2% versus a +1.3% gain in 3Q.
  • Personal Income for Dec. is estimated to rise +.5% versus a +.4% gain in Nov.
  • Personal Spending for Dec. is estimated to fall -.6% versus a +.6% gain in Nov.
  • The PCE Core MoM for Dec. is estimated to rise +.5% versus a +.5% gain in Nov.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German CPI report and the (SCHW) business update 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 commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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

Broad Equity Market Tone:

  • Advance/Decline Line:  Substantially Lower
  • Sector Performance:  Most Sectors Declining
  • Volume:   Heavy
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 31.8 -.5%
  • Bloomberg Global Risk On/Risk Off Index 2,469.0 -53.0 points
  • Euro/Yen Carry Return Index 132.30 -.38%
  • Emerging Markets Currency Volatility(VXY) 9.7 +.31%
  • CBOE S&P 500 Implied Correlation Index 47.0 +2.4% 
  • ISE Sentiment Index 89.0  -7.0 points
  • Total Put/Call 1.05 +6.1%
  • NYSE Arms .98 +5.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 62.03 +3.0%
  • US Energy High-Yield OAS 409.52 +4.1%
  • European Financial Sector CDS Index 65.87 +1.9%
  • Italian/German 10Y Yld Spread 135.0 -5.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 90.60 +2.2%
  • Emerging Market CDS Index 218.31 +1.0%
  • China Corp. High-Yield Bond USD ETF(KHYB) 31.82 -.24% 
  • Ukraine Sovereign Debt Credit Default Swap 804.91 -10.7%
  • 2-Year Swap Spread 14.0 -1.0 basis point
  • TED Spread 8.25 -.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -12.5 -.55 basis point
  • MBS  5/10 Treasury Spread  86.0 +2.75 basis points
  • IHS Markit CMBX BBB- 6 75.25 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 53.86 -.26%
  • 3-Month T-Bill Yield .19% +1.0 basis point
  • Yield Curve 66.75 -8.0 basis points
  • China Iron Ore Spot 139.75 USD/Metric Tonne +.3%
  • Citi US Economic Surprise Index 0.0 +16.1 points
  • Citi Eurozone Economic Surprise Index 65.7 +5.0 points
  • Citi Emerging Markets Economic Surprise Index 31.4 +4.6 points
  • 10-Year TIPS Spread 2.40 -5.0 basis points
  • 0.0%(-1.5 percentage points) chance of no change at May 4th FOMC meeting, 0.0%(-.2 percentage point) chance of no change at June 15th meeting
US Covid-19:
  • 1,308 new infections/100K people(last 7 days total). 76.0%(-5.0 percentage points) of 1/14 peak -81/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -10.6%(-1.5 percentage points) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +320 open in Japan 
  • China A50 Futures: Indicating +33 open in China
  • DAX Futures: Indicating -141 open in Germany
Portfolio:
  • Slightly Higher: On gains in my index hedges and emerging market shorts
  • Disclosed Trades:  None
  • Market Exposure:  25% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Growth -1.8%
Sector Underperformers:
  • 1) Semis -5.0% 2) Alt Energy -4.3% 3) Gambling -2.8%
Stocks Falling on Unusual Volume: 
  • HAYW, ROK, WRBY, NVST, WHR, MMC, YETI, SQ, SIL, BALY, AMAT, IPG, KLAC, EQ, FIBK, IPG, GWB, HCA, SHLS, LOB, AMD, SOFI, TROW, GFS, NOC, TXT, AEIS, APLS, LRCX, VLY, MTSI, INTC, HAE, UPST, TSLA, VERV, SRRA, MKSI, ICHR, FLWS, TER and LC
Stocks With Unusual Put Option Activity:
  • 1) TER 2) VFC 3) VNQ 4) JNK 5) INTC
Stocks With Most Negative News Mentions:
  • 1) TER 2) FLWS 3) LC 4) TSLA 5) INTC
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Value +.2%
Sector Outperformers:
  • 1) Pharma +1.8% 2) Airlines +.9% 3) Software +.7%
Stocks Rising on Unusual Volume:
  • LEVI, PKG, EEFT, NOW, XM, CNMD, NFLX, BX, DOW, TWNK, HZO, EDIT, GRPN, CMP, GLW, URI, MOH, HSIC and AMN
Stocks With Unusual Call Option Activity:
  • 1) TER 2) PARR 3) TGTX 4) HTA 5) LNC
Stocks With Most Positive News Mentions:
  • 1) STX 2) NOW 3) LEVI 4) PKG 5) AFYA

Morning Market Internals

NYSE Composite Index:

  • Volume Running +20.9% Above 100-Day Average 
  • 10 Sectors Rising, 1 Sector Declining
  • 57.7% of Issues Advancing, 38.0% Declining
  • 29 New 52-Week Highs, 114 New Lows
  • 36.1% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 39.1% 
  • Bloomberg Global Risk-On/Risk-Off Index 2,566.0 +43.0 points
  • Russell 1000: Growth/Value 16,407.0 -.53%
  • Vix 30.2 -5.4%
  • Total Put/Call .97 -2.0%
  • TRIN/Arms 1.16 +25.8%

Wednesday, January 26, 2022

Thursday Watch

Night Trading 

  • Asian equity indices are -1.75% to -.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 90.0 unch. 
  • China Sovereign CDS 48.0 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 53.92 -.14%. 
  • Bloomberg Global Risk-On/Risk Off Index 2,505.0 -20.0 points.
  • Volatility Index(VIX) futures 29.2 +2.0%.
  • Euro Stoxx 50 futures -1.96%.
  • S&P 500 futures -.86%.
  • NASDAQ 100 futures -1.0%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (ALK)/.22
  • (ADS)/2.19
  • (MO)/1.08
  • (BX)/1.40
  • (CMCSA)/.74
  • (DHR)/2.52
  • (DOW)/2.04
  • (HCA)/4.52
  • (IP)/.89
  • (JBLU)/-.39
  • (MA)/2.21
  • (MCD)/2.34
  • (MUR)/.40
  • (NOC)/5.96
  • (NUE)/7.86
  • (ROK)/1.94
  • (SAP)/1.61
  • (SHW)/1.35
  • (LUV)/.07
  • (TROW)/3.13
  • (TSCO)/1.85
  • (VLO)/1.79
After the Close:
  • (AAPL)/1.89
  • (BZH)/.67
  • (BOOT)/2.21
  • (CP)/.97
  • (JNPR)/.53
  • (KLAC)/5.45
  • (MDLZ)/.73
  • (RHI)/1.43
  • (HOOD)/-.30
  • (SYK)/2.72
  • (X)/4.25
  • (V)/1.70
  • (WDC)/2.12
Economic Releases
8:30 am EST
  • Initial Jobless Claims for last week are estimated to fall to 265K versus 286K the prior week.
  • Continuing Claims are estimated to rise to 1665K versus 1635K prior.
  • Durable Goods Orders for Dec. is estimated to fall -.6% versus a +2.6% gain in Nov.
  • Durables Ex Transports for Dec. is estimated to rise +.4% versus a +.9% gain in Nov.
  • Cap Goods Orders Non-Defense Ex-Air for Dec. is estimated to rise +.4% versus unch. in Nov.
  • 4Q GDP is estimated to rise +5.3% versus a +2.3% gain in 3Q.
  • 4Q Personal Consumption is estimated to rise +3.2% versus a +2.0% gain in 3Q.
  • 4Q GDP Price Index is estimated to rise +6.0% versus a +6.0% gain in 3Q.
10:00 am EST
  • Pending Home Sales MoM for Dec. is estimated to fall -.8% versus a -2.2% decline in Nov.
11:00 am EST
  • Kansas City Fed Manufacturing Activity for Jan. is estimated to fall to 22.0 versus 24.0 in Dec.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone Confidence report, 7Y T-Note auction and the weekly EIA natural gas inventory report could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are lower, weighed down by commodity and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Slightly Higher into Final Hour on Earnings Optimism, US Economic Data, Oil Gain, Tech/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line:  Substantially Higher
  • Sector Performance:  Almost Every Sector Rising
  • Volume:  Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 28.1 -9.8%
  • Bloomberg Global Risk On/Risk Off Index 2,780.0 +274.0 points
  • Euro/Yen Carry Return Index 132.98 +.29%
  • Emerging Markets Currency Volatility(VXY) 9.6 -1.9%
  • CBOE S&P 500 Implied Correlation Index 42.3 -1.4% 
  • ISE Sentiment Index 83.0  -27.0 points
  • Total Put/Call .93 +5.7%
  • NYSE Arms .96 +2.1%
Credit Investor Angst:
  • North American Investment Grade CDS Index 57.15 -2.8%
  • US Energy High-Yield OAS 395.09 -2.4%
  • European Financial Sector CDS Index 64.70 -1.6%
  • Italian/German 10Y Yld Spread 140.0 +3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 88.55 -1.4%
  • Emerging Market CDS Index 209.15 -3.1%
  • China Corp. High-Yield Bond USD ETF(KHYB) 32.26 +.70% 
  • Ukraine Sovereign Debt Credit Default Swap 901.15 -3.12%
  • 2-Year Swap Spread 15.0 +1.0 basis point
  • TED Spread 8.75 +1.0 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -12.0 +.75 basis point
  • MBS  5/10 Treasury Spread  83.25 -1.75 basis points
  • IHS Markit CMBX BBB- 6 75.25 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 54.13 -.09%
  • 3-Month T-Bill Yield .18% +1.0 basis point
  • Yield Curve 74.75 unch.
  • China Iron Ore Spot 138.45 USD/Metric Tonne +1.1%
  • Citi US Economic Surprise Index -16.10 +3.7 points
  • Citi Eurozone Economic Surprise Index 60.7 -.4 point
  • Citi Emerging Markets Economic Surprise Index 26.8 +2.5 points
  • 10-Year TIPS Spread 2.45 +3.0 basis points
  • 1.5%(-1.7 percentage points) chance of no change at May 4th FOMC meeting, .2%(n/a) chance of no change at June 15th meeting
US Covid-19:
  • 1,389 new infections/100K people(last 7 days total). 81%(-5.0 percentage points) of 1/14 peak -96/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -9.1%(-.5 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +199 open in Japan 
  • China A50 Futures: Indicating -1 open in China
  • DAX Futures: Indicating +19 open in Germany
Portfolio:
  • Higher: On gains in my commodity/tech/industrial sector longs and emerging market shorts
  • Disclosed Trades:  Covered some of my index hedges, then added them back
  • Market Exposure:  50% Net Long

Bear Radar

Style Underperformer:

  • Mid-Cap Value +.6%
Sector Underperformers:
  • 1) Telecom -1.1% 2) Gold & Silver -.5% 3) Pharma +.1%
Stocks Falling on Unusual Volume: 
  • KMB, YMAB, HTLD, ROL, HA, CLX, DISCA, ADP, T, ORA, NAVI and FFIV
Stocks With Unusual Put Option Activity:
  • 1) MUB 2) CFX 3) KMB 4) EWC 5) ITB
Stocks With Most Negative News Mentions:
  • 1) HA 2) FFIV 3) BA 4) GATO 5) KMB
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Growth +2.5%
Sector Outperformers:
  • 1) Semis +4.5% 2) Gaming +3.5% 3) Software +3.3%
Stocks Rising on Unusual Volume:
  • LRN, SRRA, DKNG, LAZR, GLW, DSKE, MAT, SF, MRTN, EDIT, MATX, WMS, INBX, TXN, MSFT, GH and TIL
Stocks With Unusual Call Option Activity:
  • 1) MAT 2) EWC 3) MFA 4) JNPR 5) EQT
Stocks With Most Positive News Mentions:
  • 1) LRN 2) GLW 3) RES 4) TXN 5) ADM

Morning Market Internals

NYSE Composite Index:

  • Volume Running +4.3% Above 100-Day Average 
  • 11 Sectors Rising, 0 Sectors Declining
  • 73.7% of Issues Advancing, 22.3% Declining
  • 29 New 52-Week Highs, 29 New Lows
  • 37.0% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 39.8% 
  • Bloomberg Global Risk-On/Risk-Off Index 2,636.0 +130.0 points
  • Russell 1000: Growth/Value 16,546.0 +1.13%
  • Vix 30.0 -3.5%
  • Total Put/Call 1.01 +14.8%
  • TRIN/Arms 1.40 +48.9%