Wednesday, February 03, 2021

Stocks Slightly Higher into Final Hour on Stimulus Hopes, Economic Data, Oil Gain, Commodity/Retail Sector Strength

 Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 23.2 -9.2%
  • Bloomberg Global Risk On/Risk Off Index 2,098.0 +197.0 points
  • Euro/Yen Carry Return Index 130.69 -.08%
  • Emerging Markets Currency Volatility(VXY) 10.1 -.98%
  • S&P 500 Implied Correlation 50.1 -2.4%
  • ISE Sentiment Index 149.0 +43.0 points
  • Total Put/Call .84 +7.7%
  • NYSE Arms .56 -67.8%
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.51 -1.2%
  • US Energy High-Yield OAS 502.10 -1.34%
  • European Financial Sector CDS Index 59.23 -2.59%
  • Italian/German 10Y Yld Spread 105.0 -9.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 59.88 -2.63%
  • Emerging Market CDS Index 160.69 -3.16%
  • iBoxx Offshore RMB China Corporate High Yield Index 185.57 +.09%
  • 2-Year Swap Spread 8.5 +.75 basis point
  • TED Spread 15.25 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.5 +.25 basis point
  • MBS  5/10 Treasury Spread  65.75 -.75 basis point
  • IHS Markit CMBX BBB- 6 74.75 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 62.43 +.03%
  • 3-Month T-Bill Yield .04% unch.
  • Yield Curve 101.5 +3.25 basis points
  • China Iron Ore Spot 147.15 USD/Metric Tonne +2.37%
  • Citi US Economic Surprise Index 67.90 +7.4 points
  • Citi Eurozone Economic Surprise Index 150.9 +25.5 points
  • Citi Emerging Markets Economic Surprise Index 67.40 -1.3 points
  • 10-Year TIPS Spread 2.17 +3.0 basis points
  • 100.0% chance of no change at April 28th meeting, 100.0% chance of no change at June 16th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -56 open in Japan 
  • China A50 Futures: Indicating -81 open in China
  • DAX Futures: Indicating +25 open in Germany
Portfolio:
  • Slightly Higher: On gains in my energy/tech/industrial sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

Mid-Day Market Internals

NYSE Composite Index:
  • Volume Running +3.3% Above 100-Day Average 
  • 8 Sectors Rising, 3 Sectors Declining
  • 52.4% of Issues Advancing, 45.1% Declining
  • 99 New 52-Week Highs, 0 New Lows
  • 83.9% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 48.6% 
  • Bloomberg Global Risk-On/Risk-Off Index 2,080.0 +179.0 points
  • Vix 23.6 -7.7%
  • Total Put/Call .81 +3.9%
  • TRIN/Arms .51 -70.7%

Tuesday, February 02, 2021

Wednesday Watch

Evening Headlines
Bloomberg:            
Wall Street Journal:
CNBC.com:
Zero Hedge:
Newsmax:
TheGatewayPundit.com:
Night Trading 
  • Asian equity indices are +.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 60.0 -1.75 basis points.
  • China Sovereign CDS 30.25 -.75 basis point.
  • Bloomberg Emerging Markets Currency Index 62.45 +.05%.
  • Bloomberg Global Risk-On/Risk Off Index 1,938.0 +36.0 points.
  • Volatility Index(VIX) futures 28.42 -1.11%.
  • FTSE 100 futures +.31%.
  • S&P 500 futures +.40%.
  • NASDAQ 100 futures +.50%.
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (ABBV)/2.85
  • (APTV)/1.01
  • (BIIB)/4.76
  • (BSX)/.31
  • (GWW)/3.84
  • (HUM)/-2.32
  • (SMG)/-.68
After the Close:
  • (ADTN)/.07
  • (AFL)/1.04
  • (ALGN)/2.13
  • (ALL)/3.83
  • (UHAL)/7.08
  • (AVB)/2.09
  • (CTSH)/.90
  • (EBAY)/.83
  • (GRUB)/.04
  • (IAC)/-.34
  • (KLAC)/3.21
  • (MET)/1.51
  • (PYPL)/1.00
  • (QCOM)/2.09
  • (RGLD)/.88
  • (SUM)/.17
  • (YUMC)/.26
Economic Releases
8:15 am EST
  • The ADP Employment Change for Jan. is estimated to rise to 50K versus -123K in Dec.
10:00 am EST
  • The ISM Services Index for Jan. is estimated to fall to 56.7 versus 57.2 in Dec.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -971,550 barrels versus a -9,910,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +914,450 barrels versus a +2,469,000 barrel gain the prior week. Distillate inventories are estimated to rise to -246,090 barrels versus a -815,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall -.02% versus a -.8% decline prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German Services PMI report, weekly MBA Mortgage Applications report and the (COST) Jan. sales results could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are modestly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the day.

Stocks Substantially Higher into Final Hour on Stimulus Hopes, Vaccine Optimism, Oil Gain, Transport/Financial Sector Strength

Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 25.4 -15.9%
  • Bloomberg Global Risk On/Risk Off Index 1,899.0 +481.0 points
  • Euro/Yen Carry Return Index 130.70 -.17%
  • Emerging Markets Currency Volatility(VXY) 10.3 -1.1%
  • S&P 500 Implied Correlation 52.1 -.02%
  • ISE Sentiment Index 101.0 -54.0 points
  • Total Put/Call .76 -1.3%
  • NYSE Arms 2.27 +180.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 53.01 -3.4%
  • US Energy High-Yield OAS 510.40 -1.60%
  • European Financial Sector CDS Index 60.83 -2.2%
  • Italian/German 10Y Yld Spread 114.0 -2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 61.50 -1.79%
  • Emerging Market CDS Index 165.47 -3.37%
  • iBoxx Offshore RMB China Corporate High Yield Index 185.40 -.12%
  • 2-Year Swap Spread 7.75 unch.
  • TED Spread 15.25 -.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.75 +.25 basis point
  • MBS  5/10 Treasury Spread  66.5 -2.25 basis points
  • IHS Markit CMBX BBB- 6 73.75 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 62.42 +.34%
  • 3-Month T-Bill Yield .04% -1.0 basis point
  • Yield Curve 98.75 +2.5 basis points
  • China Iron Ore Spot 144.15 USD/Metric Tonne -3.71%
  • Citi US Economic Surprise Index 60.50 -.1 point
  • Citi Eurozone Economic Surprise Index 125.4 +1.4 points
  • Citi Emerging Markets Economic Surprise Index 68.70 +4.9 points
  • 10-Year TIPS Spread 2.14 +5.0 basis points
  • 100.0% chance of no change at April 28th meeting, 100.0% chance of no change at June 16th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +113 open in Japan 
  • China A50 Futures: Indicating -103 open in China
  • DAX Futures: Indicating +12 open in Germany
Portfolio:
  • Higher: On gains in my energy/tech/industrial/biotech/medical sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

Bear Radar

 Style Underperformer:

  • Small-Cap Value +.6%
Sector Underperformers:
  • 1) Retail -7.2% 2) Gold & Silver -4.6% 3) Networking -.6%
Stocks Falling on Unusual Volume: 
  • KMPR, CURI, AHCO, LGND, KPTI, AQUA, VRTX, CRUS, SPCE, LITE, PSAC, GATO, FIZZ, KMT, SKT, INO, MAC, MITK, THCB, BCRX, TR, BGS, FLGT, RVP, HOG, VRNT, IMVT and GME
Stocks With Unusual Put Option Activity:
  • 1) GOGO 2) SAVA 3) LITE 4) MNST 5) VXRT
Stocks With Most Negative News Mentions:
  • 1) EXPR 2) LLNW 3) AAL 4) KR 5) IRTC
Charts:

Bull Radar

Style Outperformer:
  • Mid-Cap Growth +2.1%
Sector Outperformers:
  • 1) Gaming +6.2% 2) Banks +3.2% 3) Road & Rail +2.7%
Stocks Rising on Unusual Volume:
  • SAVA, ALVR, MWK, VXRT, AKTS, ATKR, CDXS, HAE, CCIV, CRDF, SKY, DKNG, WAT, SLM, NRIX, TSIA, LPG, XONE, LSXMA, SWCH, CLDR, LSXMK, ALDX, CLGX, GPRE, CENX, OMCL, POWI, PEGA, STPK and OMER
Stocks With Unusual Call Option Activity:
  • 1) DVAX 2) SLM 3) XLI 4) VTV 5) AEZS
Stocks With Most Positive News Mentions:
  • 1) TECH 2) PRTA 3) TVTX 4) DKNG 5) PANW
Charts: