Bull Radar

Style Outperformer:

• Mid-Cap Value +.1%

Sector Outperformers:

• 1) Coal +2.2% 2) Steel +1.8% 3) Road & Rail +1.0%

Stocks Rising on Unusual Volume:

• CYCC, GNCMA, PRTK, LVNTA, CONN, AFSI, RDHL, LL, ACHC, ESTE, GOGO, CIT, NVO, RST, MSGN, VNO, SJI, AKAM and PBA

Stocks With Unusual Call Option Activity:

• 1) UNP 2) SPLS 3) FL 4) RCL 5)KATE

Stocks With Most Positive News Mentions:

• 1) PRTK 2) ONTX 3) TTMI 4) CRUS 5) ETN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.8% Below 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 36.7% of Issues Advancing, 58.2% Declining
• 37 New 52-Week Highs, 19 New Lows
• 55.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.6%
• Vix 12.5 +.9%
• Total Put/Call 1.44 +46.9%
• TRIN/Arms 1.19 -28.1%

Tuesday Watch

Evening Headlines

Bloomberg:

• This French City Knows Le Pen Well and Sees Her Getting Stronger. Mainstream parties are struggling to maintain voters’ support in the regional capital of Perpignan.

• Australia Losing AAA Would Spark Turn to Bank Debt, NAB Says. Australia’s biggest banks would find new demand for their debt if the country loses its top credit score. That’s the view of Eva Zileli, head of group funding at the nation’s fourth-largest lender by market value, National Australia Bank Ltd. Australian banks receive sovereign support for their credit scores and while a downgrade of the country’s AAA rating would force lenders to pay more to tap debt markets, it would also deepen their investor pool as higher-yielding paper lures new investors, she said.

• Asia Stocks Drop as Yen Gains; Rand Extends Loss. The yen climbed against the dollar for a third day. Equities in Japan, Australia and South Korea all retreated. U.S. shares were led lower by auto manufacturers that reported worse-than-expected U.S. sales for March. China, Hong Kong, Taiwan and India are closed for a holiday. South Africa’s rand extended losses for a seventh day after the country lost its investment-grade credit rating from S&P Global Ratings for the first time in 17 years. The Russian ruble steadied after declines sparked by a subway bomb in St. Petersburg that killed 11 people. The yen rose 0.2 percent to 110.68 per dollar as of 9:17 a.m. in Tokyo, after climbing 0.4 percent on Monday. The Topix index lost 0.6 percent. Australia’s S&P/ASX 200 Index sank 0.2 percent and South Korea’s Kospi slid 0.4 percent.

• Your Evening Briefing.

• Trump Cracks Down on H-1B Visa Program That Feeds Silicon Valley. The U.S. administration began to deliver on President Donald Trump’s campaign promise to crack down on a work visa program that channels thousands of skilled overseas workers to companies across the technology industry. Fed up with a program it says favors foreign workers at the expense of Americans, the Trump administration rolled out a trio of policy shifts. The U.S. Citizenship and Immigration Services agency on Friday made it harder for companies to bring overseas tech workers to the U.S. using the H-1B work visa. On Monday, the agency issued a memo laying out new measures to combat what it called "fraud and abuse" in the program. The Justice Department also warned employers applying for the visas not to discriminate against U.S. workers.

Wall Street Journal:

• Russian Probe of St. Petersburg Subway Blast Focuses on Terror. 11 dead, another explosive device disarmed as Russian officials search ‘for perpetrators and organizers of terrorist act'.

• A Lawsuit Accuses Yale of Censoring Even Inoffensive Ideas. A class essay condemning rape was ‘unnecessarily provocative,’ the Title IX coordinator allegedly said.

Fox News: 

• Gorsuch wins Senate panel endorsement, setting up floor showdown. (video)

MarketWatch:

• U.S. households will soon have as much debt as they had in 2008.

CNBC:

• Marissa Mayer will not be part of the new AOL-Yahoo combined company called Oath.

• Trump to hold town hall meeting with about 50 business leaders.

• Fed's Harker still backs two more rate hikes this year.

• The record run for tech stocks is far from over, analysts and traders say. (video)

Zero Hedge:

• Spicer Says Susan Rice Investigation Moving In A "Troubling Direction".

• JPMorgan: "This Market Is Supported By The Trump And Fed Puts: Buy The Dip".

• New York Fed's Dudley Admits Fed-Inspired Student Debt Bubble Is Headwind For Economy. (graph)

• Why Special Interests Sacrifice The Future For Short-Term Gain.

• Venezuela's Money Supply Soars By A Record 200%. (graph)

• Following AG Sessions' Threat, NYC No Longer A Sanctuary City.

• Stocks Start Q2 With A Whimper: VIX Smash Saves Dow As Reflation Trade Is MIA. (graph)

Business Insider: 

• The Senate just cleared the first hurdle in confirming Neil Gorsuch to the Supreme Court.

• A startup that pits apartment hunters against each other could create upheaval in the rental market.

Night Trading 

• Asian equity indices are unch. to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 94.5 unch. 

• Asia Pacific Sovereign CDS Index 21.25 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 72.03 -.03%. 

• S&P 500 futures -.15%. 

• NASDAQ 100 futures -.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CONN)/-.18

• (SHLM)/.30

• (ISCA)/.45

Economic Releases
8:30 am EST 

• The Trade Deficit for February is estimated at -$44.5B versus -$48.5B in January. 

10:00 am EST

• Factory Orders for February are estimated to rise +1.0% versus a +1.2% gain in January.  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Tarullo speaking, Eurozone retail sales reports, weekly US retail sales reports, (DAL) traffic data report, (PWR) investor day, Needham Healthcare Conference, BofA Merrill Oil & Gas Conference, World Retail Congress could also impact trading today.

BOTTOM LINE:  Asian indices are modestly lower, weighed down by consumer and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Slightly Lower into Final Hour on Less Economic Optimism, Oil Decline, Yen Strength, Retail/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.73 +2.91%

• Euro/Yen Carry Return Index 123.47 -.39%

• Emerging Markets Currency Volatility(VXY) 9.04 -.33%

• S&P 500 Implied Correlation 44.63 +.56%

• ISE Sentiment Index 54.0 +4.0%
  

• Total Put/Call .94 -20.3%

• NYSE Arms 1.79 +16.89%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.67 +.13%
  

• America Energy Sector High-Yield CDS Index 334.0 -.48%

• European Financial Sector CDS Index 92.06 +3.86%

• Western Europe Sovereign Debt CDS Index 12.96 +3.97%

• Asia Pacific Sovereign Debt CDS Index 21.28 +.47%

• Emerging Market CDS Index 213.96 +.44%
  

• iBoxx Offshore RMB China Corporate High Yield Index 136.55 +.06%

• 2-Year Swap Spread 35.25 -.75 basis point

• TED Spread 38.75 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -25.0 +.5 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.01 -.18%
• 3-Month T-Bill Yield .76% unch.
  

• Yield Curve 111.0 -3.0 basis points
  

• China Import Iron Ore Spot $79.36/Metric Tonne -1.18%

• Citi US Economic Surprise Index 44.50 -3.5 points

• Citi Eurozone Economic Surprise Index 47.70 -6.4 points

• Citi Emerging Markets Economic Surprise Index 31.30 -3.1 points

• 10-Year TIPS Spread 1.97 unch.
  
• 56.7% chance of Fed rate hike at June 14 meeting, 61.3% chance at July 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +77 open in Japan 
• China A50 Futures: Indicating +54 open in China

• DAX Futures: Indicating +55 open in Germany

Portfolio: 

• Slightly Lower: On losses in my retail sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Today's Headlines

Bloomberg:

• Euro-Area Unemployment Falls to Lowest Level in Eight Years. Euro-area unemployment fell to the lowest in almost eight years and a measure of manufacturing accelerated as factories in the region’s biggest economies benefited from improving global growth. The average jobless rate declined to 9.5 percent in February from 9.6 percent in January. It’s been decreasing steadily from a peak of more than 12 percent in 2013 and is now at the lowest since May 2009. Separately, IHS Markit said its Purchasing Managers’ Indexes for Germany, France and Italy all rose in March, helping to pushing its euro-region gauge to the highest since 2011. New export business increased in all three nations.

• Venezuela Credit Dashboard: Default Risk Spikes as Payment Looms. (video)

• U.S. Stocks Decline as Auto Sales Trail Estimates. (video) The Stoxx Europe 600 dropped 0.49 percent, after increasing 5.5 percent for the first three months of the year, the best quarter in two years. The MSCI All Country World Index was down roughly 0.5 percent.

• Tesla(TSLA) Passes Ford by Market Cap Before Musk Delivers Model 3. (video) The electric-carmaker climbed as much as 5.7 percent a day after beating analysts’ estimates by reporting shipments of 25,000 cars and SUVs in the first quarter. Its market value is now at about $47.6 billion, $2.7 billion more than Ford. Tesla has supplanted Ford even though it delivered fewer than 80,000 vehicles globally last year, compared with 6.7 million from Ford, the second-biggest automaker in the country behind General Motors Co.

• Panera Bread (PNRA) Said to Explore Possible Sale After Receiving Takeover Interest.

Wall Street Journal:

• Digital Clue Links North Korea to Theft at New York Fed, Security Firm Says. Kaspersky Lab says digital records show link to a computer with North Korean internet address.

Fox News:

• St. Petersburg subway blast: Two suspects sought in bombing that killed 10. (video)

CNBC:

• Put me in, coach: Money is pouring into the market from the sidelines. (video)

• April is the Dow's best month and these stocks do particularly well.

• China wants a piece of the US infrastructure boom. Trump won't let it come easy. (video)

• How Democrats are about to give Trump his groove back. (video)

• Wall Street is vastly underestimating how many people are going to buy the next iPhone, analyst says. (video)

• Shares of US auto companies fall as car sales decline. (video)

• The best could still be ahead for surging Amazon — and here's how to play it. (video)

Zero Hedge:

• Confirmed: Susan Rice "Unmasked" Trump Team.

• Democrats Have Enough Votes To Block Gorsuch Nomination, "Nuclear" Showdown Inevitable.

• Russia Releases First Photo Of St Petersburg Terrorism Suspect As Death Toll Climbs.

• 'Soft' Data Slammed As Manufacturing PMI Plunges To 6-Month Lows: "Bodes Ill For Second Quarter". (graph)

• The Best And Worst Performing Assets Of The First Quarter.

• Gorsuch "Nuclear Option" Could "Fundamentally Transform" The Senate Forever.

• A Record 67% Of Low-Income Americans Are Worried "A Great Deal" About Hunger And Homelessness.

• Russia Releases First Photo Of St Petersburg Terrorism Suspect As Death Toll Climbs.

Business Insider:

• Baltic states think Russia is laying the groundwork for looming 'kinetic operations'.

• One of the most anticipated hedge fund launches this year is even bigger than we thought.

• This robotic surgery is so intricate it can stitch a peeled grape back together. (video)