Stocks Falling into Final Hour on Coronavirus Fears, Global Growth Worries, Oil Decline, Tech/Commodity Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 16.1 +7.8%

• Euro/Yen Carry Return Index 124.62 -.54%

• Emerging Markets Currency Volatility(VXY) 6.92 +5.3%

• S&P 500 Implied Correlation 39.0 +3.8%

• ISE Sentiment Index 70.0 -27
  

• Total Put/Call .94 +32.4%

• NYSE Arms 1.43 +29.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 45.86 +1.4%
  

• America Energy Sector High-Yield CDS Index 624.0 +.68%

• European Financial Sector CDS Index 49.12 +2.12%

• Italian/German 10Y Yld Spread 133.0 -.5 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 52.98 +.9%
  

• Emerging Market CDS Index 190.17 +2.42%
  

• iBoxx Offshore RMB China Corporate High Yield Index 169.82 -.16%

• 2-Year Swap Spread 5.25 -.5 basis point

• TED Spread 18.0 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -1.0 point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.36 -.31%
• 3-Month T-Bill Yield 1.56% +1.0 basis point

• Yield Curve .20 -1.0 basis point

• China Iron Ore Spot 78.50 USD/Metric Tonne -2.59%

• Citi US Economic Surprise Index 45.40 +5.6 points

• Citi Eurozone Economic Surprise Index -9.5 -17.1 points

• Citi Emerging Markets Economic Surprise Index 23.5 -1.8 points

• 10-Year TIPS Spread 1.65 -1.0 basis point
• 30.1% chance of Fed April 29th meeting, 46.6% chance of cut at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -137 open in Japan 
• China A50 Futures: Indicating -221 open in China

• DAX Futures: Indicating -51 open in Germany

Portfolio:

• Slightly Lower: On losses in my biotech/tech/industrial/medical/retail sector longs

• Disclosed Trades:Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.8%

Sector Underperformers:

• 1) Networking -2.4% 2) Steel -2.2% 3) Gaming -2.0%

Stocks Falling on Unusual Volume: 

• COLM, NTGR, PRO, TDC, FNF, VRSN, ROAD, FLT, AVTR, TSE, TPIC, ARVN, HSC, SONO, TTWO, SGH, DLX, MTW, UI, MYGN and ZGNX

Stocks With Unusual Put Option Activity:

• 1) GLUU 2) TTWO 3) URBN 4) NVTA 5) CCL

Stocks With Most Negative News Mentions:

• 1) ACB 2) ZGNX 3) I 4) GRUB 5) GOOS

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.1%

Sector Outperformers:

• 1) Homebuilding +.7% 2) Telecom +.6% 3) Software +.5%

Stocks Rising on Unusual Volume:

• SYNA, COLL, PINS, BILL, NLOK, CCS, UBER, NOV, VCRA, AAWW, VRTU, HUBG, ESPR, LGF/B, MAXR, BYND, TWOU, NVTA, PFSI, EVER, SKX, LGND, ABBV, LYFT, DT, VIR, MRNA, CURO, EAF, ALNY, KAR, TWLO, SAVE, ICE and FLO

Stocks With Unusual Call Option Activity:

• 1) APO 2) JNPR 3) TDC 4) EWJ 5) ATVI

Stocks With Most Positive News Mentions:

• 1) SYNA 2) PINS 3) UBER 4) NFLX 5) APDN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +24.4% Above 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 37.1% of Issues Advancing, 60.2% Declining
• 176 New 52-Week Highs, 53 New Lows
• 63.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.8%
• Vix 15.2 +1.5%
• Total Put/Call .91 +28.2%
• TRIN/Arms 1.15 +1.77%

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 52.5 unch.

• China Sovereign CDS 34.75 +1.5 basis points.

• Bloomberg Emerging Markets Currency Index  65.35 -.04%.
• FTSE 100 futures n/a.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (ABBV)/2.20
• (CCJ)/.14
• (GOOS)/1.07
• (CBOE)/1.13
• (CNHI)/.21
• (HBI)/.51 
• (HMC)/76.80
• (SOHU)/-.40

After the Close:

• None of note

Economic Releases 

8:30 am EST

• The Change in Non-Farm Payrolls for Jan. is estimated to rise to 162K versus 145K in Dec.
• The Unemployment Rate for Jan. is estimated at 3.5% versus 3.5% in Dec.
• Average Hourly Earnings MoM for Jan. is estimated to rise +.3% versus a +.1% gain in Dec.

10:00 am EST

• Wholesale Trade Sales MoM for Dec. is estimated to rise +.1% versus a +1.5% gain in Nov.

3:00 pm EST

• Consumer Credit for Dec. is estimated to rise to $15.0B versus $12.513B in Nov.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Trade Balance report could also impact trading today.

Market Hours

Normal:

• 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 75% net long heading into the day.

Stocks Higher into Final Hour on Earnings Optimism, Oil Gain, Short-Covering, Tech/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.9 1.6%

• Euro/Yen Carry Return Index 125.23 -.07%

• Emerging Markets Currency Volatility(VXY) 6.6 +1.2%

• S&P 500 Implied Correlation 37.3 -4.8%

• ISE Sentiment Index 97.0 -4
  

• Total Put/Call .71 -26.0%

• NYSE Arms .98 -3.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 45.14 -.39%
  

• America Energy Sector High-Yield CDS Index 617.0 -4.69%

• European Financial Sector CDS Index 48.10 -2.35%

• Italian/German 10Y Yld Spread 133.5 +1.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 52.37 -.54%
  

• Emerging Market CDS Index 185.76 +82%
  

• iBoxx Offshore RMB China Corporate High Yield Index 170.10 +.04%

• 2-Year Swap Spread 5.75 -.25 basis point

• TED Spread 17.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.36 -.31%
• 3-Month T-Bill Yield 1.56% +1.0 basis point

• Yield Curve .21 +2.0 basis points

• China Iron Ore Spot 79.65 USD/Metric Tonne -.31%

• Citi US Economic Surprise Index 39.80 +2.6 points

• Citi Eurozone Economic Surprise Index 7.6 -5.4 points

• Citi Emerging Markets Economic Surprise Index 25.3 -1.1 points

• 10-Year TIPS Spread 1.66 unch.
• 21.3% chance of Fed April 29th meeting, 36.6% chance of cut at June 10th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +41 open in Japan 
• China A50 Futures: Indicating -206 open in China

• DAX Futures: Indicating -14 open in Germany

Portfolio:

• Higher: On gains in my biotech/tech/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long