Wednesday, February 12, 2020

Thursday Watch

Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 49.5 -.5 basis point.
  • China Sovereign CDS 33.75 +1.25 basis points.
  • Bloomberg Emerging Markets Currency Index  65.02 -.10%.
  • FTSE 100 futures +.07%.
  • S&P 500 futures -.28%.
  • NASDAQ 100 futures -.35%.

Earnings of Note 
Company/Estimate
Before the Open:
  • (BABA)/15.7
  • (AIG)/1.01
  • (AVP)/.07
  • (BWA)/1.03
  • (DLPH)/.5
  • (DISH)/.54
  • (DUK)/.97
  • (GNRC)/1.37
  • (KHC)/.68 
  • (LH)/2.80
  • (PEP)/1.45
  • (R)/.03
  • (TPX)/1.17
  • (THS)/1.10
  • (WH)/.81
  • (YETI)/.43
  • (ZBRA)/3.65
  • (ZTS)/.88
After the Close:
  • (CGNX)/.14
  • (DDOG)/-.02
  • (EXPE)/1.20
  • (LOGM)/1.40
  • (MAT)/.02
  • (MHK)/2.20
  • (NVDA)/1.67
  • (ROKU)/-.13
  • (TRUP)/.13
  • (VECO)/.08 
  • (YELP)/.60
Economic Releases 
8:30 am EST
  • The CPI MoM for Jan. is estimated to rise +.2% versus a +.2% gain in Dec.
  • The CPI Ex Food and Energy MoM for Jan. is estimated to rise +.2% versus a +.1% gain in Dec.
  • Real Avg. Weekly Earnings YoY for Jan.
  • Initial Jobless Claims for last week are estimated to rise to 210K versus 202K the prior week. 
  • Continuing Claims are estimated to fall to 1734K versus 1751K prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Mexico Central Bank decision, $19B 30Y T-Bond auction, weekly EIA natural gas inventory report, Keefe Bruyette Woods Financial Services Symposium and the Guggenheim Oncology 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 lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Higher into Final Hour on Diminishing Coronavirus Fears, China Stimulus Hopes, Oil Gain, Energy/Healthcare 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) 13.9 -8.7%
  • Euro/Yen Carry Return Index 124.16 -.15%
  • Emerging Markets Currency Volatility(VXY) 6.74 -.88%
  • S&P 500 Implied Correlation 36.22 -1.87%
  • ISE Sentiment Index 103.0 -39
  • Total Put/Call .69 -6.8%
  • NYSE Arms .80 -9.09%
Credit Investor Angst:
  • North American Investment Grade CDS Index 44.11 -1.89%
  • America Energy Sector High-Yield CDS Index 630.0 -2.85%
  • European Financial Sector CDS Index 47.30 -3.07%
  • Italian/German 10Y Yld Spread 129.0 -7.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 49.11 -3.01%
  • Emerging Market CDS Index 192.15 -.72%
  • iBoxx Offshore RMB China Corporate High Yield Index 169.88 +.02%
  • 2-Year Swap Spread 4.25 +1.5 basis points
  • TED Spread 14.25 -4.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -7.0 -.25 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 65.08 -.07%
  • 3-Month T-Bill Yield 1.57%+1.0 basis point
  • Yield Curve .18 unch.
  • China Iron Ore Spot 85.92 USD/Metric Tonne +2.75%
  • Citi US Economic Surprise Index 46.30 +1.1 points
  • Citi Eurozone Economic Surprise Index -19.3 -1.9 points
  • Citi Emerging Markets Economic Surprise Index 21.1 -5.0 points
  • 10-Year TIPS Spread 1.67 +2.0 basis points
  • 19.6% chance of Fed April 29th meeting, 37.2% chance of cut at June 10th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +109 open in Japan 
  • China A50 Futures: Indicating +24 open in China
  • DAX Futures: Indicating +3 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/retail sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

Morning Market Internals

NYSE Composite Index:

Tuesday, February 11, 2020

Wednesday Watch

Evening Headlines
Bloomberg:   
  • Asia’s Stocks Trade Mixed, Treasuries Hold Losses. Asian stocks opened in mixed fashion Wednesday as investors weighed the spreading coronavirus against expectations for policy support. Treasuries held modest losses. Australia’s shares ticked up after earnings from the country’s biggest bank and the nation’s bond yields advanced. Japanese stocks swung in early trading, reopening after a holiday. South Korea’s equities were little changed amid a surprise increase in the country’s unemployment rate. Meanwhile, New Zealand’s central bank left interest rates unchanged and said forecasts showed no chance of a cut this year. The kiwi dollar advanced. Earlier, the S&P 500 Index closed off the day’s highs Tuesday on reports of fresh antitrust scrutiny for tech firms, though still posted a fresh record. Ten-year Treasury yields were around 1.60%. Japan’s Topix index slipped 0.2% as of 10:05 a.m. in Tokyo. South Korea’s Kospi fell 0.1%. Futures on the S&P 500 were flat. The underlying gauge rose 0.2% on Tuesday. Australia’s S&P/ASX 200 Index rose 0.4%.  
Zero Hedge:
Night Trading 
  • Asian equity indices are -.5% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 50.0 -.75 basis point.
  • China Sovereign CDS 35.0 -1.0 basis point.
  • Bloomberg Emerging Markets Currency Index  65.16 +.05%.
  • FTSE 100 futures -.03%.
  • S&P 500 futures +.06%.
  • NASDAQ 100 futures +.10%.
Morning Preview Links

Earnings of Note 
Company/Estimate
Before the Open:
  • (AB)/.70
  • (GOLD)/.14
  • (BG)/.29
  • (CME)/1.55
  • (CVS)/1.69
  • (GPN)/1.60
  • (TAP)/.78
  • (MCO)/1.92
  • (SHOP)/.24
  • (TEVA)/.61
After the Close:
  • (ANDE)/.50
  • (AMAT)/.93
  • (CF)/.26
  • (CSCO)/.76
  • (EFX)/1.49
  • (MRO)/.11 
  • (MGM)/.27
  • (NTAP)/1.18
  • (RDFN)/-.12
  • (SPWR)/.24
  • (TRIP)/.34
Economic Releases 
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory gain of +3,157,420 barrels versus a +3,355,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +620,000 barrels versus a -91,000 barrel decline the prior week. Distillate inventories are estimated to fall by -628,050 barrels versus a -1,512,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.23% versus a +.2% gain prior.
2:00 pm EST
  • The Monthly Budget Statement for Jan. is estimated at -$10.0B versus $8.7B in Dec.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Powell testimony to Congress, Eurozone Industrial Production report, $27B 10Y T-Note auction, weekly MBA Mortgage Applications report, Cowen Aerospace/Defense/Industrials conference could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.