Tuesday, February 11, 2020

Stocks Higher into Final Hour on China Stimulus Hopes, Oil Bounce, Short-Covering, Telecom/Commodity Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 14.8 -1.6%
  • Euro/Yen Carry Return Index 124.37 +.08%
  • Emerging Markets Currency Volatility(VXY) 6.80 -1.2%
  • S&P 500 Implied Correlation 36.77 -.05%
  • ISE Sentiment Index 142.0 +45
  • Total Put/Call .66 -23.3%
  • NYSE Arms .84 -39.1%
Credit Investor Angst:
  • North American Investment Grade CDS Index 44.75 -1.14%
  • America Energy Sector High-Yield CDS Index 647.0 +3.17%
  • European Financial Sector CDS Index 48.81 -1.58%
  • Italian/German 10Y Yld Spread 136.0 -.25 basis point
  • Asia Ex-Japan Investment Grade CDS Index 50.64 -2.6%
  • Emerging Market CDS Index 192.70 -.67%
  • iBoxx Offshore RMB China Corporate High Yield Index 169.85 unch.
  • 2-Year Swap Spread 3.0 -.75 basis point
  • TED Spread 18.25 -1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -6.75 +.5 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 65.15 +.37%
  • 3-Month T-Bill Yield 1.56% unch.
  • Yield Curve .18 unch.
  • China Iron Ore Spot 83.80 USD/Metric Tonne +4.41%
  • Citi US Economic Surprise Index 45.20 -1.0 point
  • Citi Eurozone Economic Surprise Index -17.4 -.9 point
  • Citi Emerging Markets Economic Surprise Index 26.1 +1.5 points
  • 10-Year TIPS Spread 1.65 unch.
  • 24.9% chance of Fed April 29th meeting, 43.2% chance of cut at June 10th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +209 open in Japan 
  • China A50 Futures: Indicating -21 open in China
  • DAX Futures: Indicating -11 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/industrial/retail/medical sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:
  • Large-Cap Growth +.3%
Sector Underperformers:
  • 1) Gold & Silver -.3% 2) Software -.3% 3) Biotech -.1%
Stocks Falling on Unusual Volume: 
  • MCY, EPC, JCOM, MAC, CVNA, MLM, TLRA, CHGG, MAS, WORK, JLL, TGNA, CDXS, FLOW, ACMR, EEFT, ELY, RVNC, MRNA, RPD, KOD, GSX, GT and UAA
Stocks With Unusual Put Option Activity:
  • 1) IRM 2) MAS 3) UAA 4) TRIP 5) XPO
Stocks With Most Negative News Mentions:
  • 1) UAA 2) GNMK 3) PQG 4) SPR 5) EFX
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +.9%
Sector Outperformers:
  • 1) Telecom +5.9% 2) Steel +2.9% 3) Papers +2.7%
Stocks Rising on Unusual Volume:
  • AMKR, ADVM, WIFI, COMM, BHF, SHEN, TMUS, CMP, CRL, AN, INGR, SBAC, VSLR, LC, DVA, MOH, SGH, RNG, DISH, BLKB, NSTG, CCI, OMF, IIVI and LMNX
Stocks With Unusual Call Option Activity:
  • 1) UAA 2) CHGG 3) KWEB 4) HAS 5) S
Stocks With Most Positive News Mentions:
  • 1) RNG 2) AN 3) ROKU 4) NVDA 5) ABBV
Charts:

Morning Market Internals

NYSE Composite Index:

Monday, February 10, 2020

Tuesday Watch

Evening Headlines
Bloomberg: 
  • Asian Stocks Open Firmer as Virus Fears Linger. Asian equities opened higher Tuesday after U.S. stocks hit a record high as investors looked past the potential economic impact of the spreading coronavirus. Shares in Sydney and Seoul were higher. Futures pointed to gains in Hong Kong. Japanese financial markets are shut for a holiday. U.S. equity futures were little changed after the S&P 500 Index climbed to a new high Monday, with most sectors advancing. The Chinese yuan traded offshore maintained gains, while the yen was little changed. The S&P/ASX 200 Index rose 0.7%. South Korea’s Kospi index added 0.7%. Contracts on Hong Kong’s Hang Seng Index rose 0.1% earlier. FTSE China A50 futures gained 0.5%. S&P 500 futures were little changed.  
Night Trading 
  • Asian equity indices are .25% to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 50.75 -2.75 basis points.
  • China Sovereign CDS 36.0 -.75 basis point.
  • Bloomberg Emerging Markets Currency Index  64.96 +.08%.
  • FTSE 100 futures +.59%.
  • S&P 500 futures +.28%.
  • NASDAQ 100 futures +.44%.
Morning Preview Links

Earnings of Note 
Company/Estimate
Before the Open:
  • (DBD)/.49
  • (D)/1.15
  • (GT)/.53
  • (HAS)/.92
  • (HLT)/.96
  • (JLL)/5.89
  • (LPX)/.12
  • (MLM)/2.23
  • (SEE)/.75
  • (UAA)/.10
After the Close:
  • (AKAM)/1.13
  • (LSCC)/.15
  • (LYFT)/-.53
  • (NCR)/.84
Economic Releases 
6:00 am EST
  • The NFIB Small Business Optimism report for Jan. is estimated to rise to 103.5 versus 102.7 in Dec.
10:00 am EST
  • The JOLTS Job Openings report for Dec. is estimated to rise to 6925 versus 6800 in Nov.
  • MBA 4Q Mortgage Delinquencies/Foreclosures reports.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Powell testimony to Congress, Fed's Quarles speaking, Democratic NH Primary, UK GDP report, UK Industrial Production report, US weekly retail sales reports, Goldman Tech/Internet Conference, Stifel Transport/Logistics Conference, (V) investor day 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 commodity 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.