Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +1.7% Above 100-Day Average 
• 3 Sectors Declining, 8 Sectors Rising
• 72.4% of Issues Advancing, 25.0% Declining
• 60 New 52-Week Highs, 3 New Lows
• 48.5%(+4.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 +3.0
  
• Bloomberg Global Risk-On/Risk-Off Index 56.5 -2.1%
  
• Russell 1000: Growth/Value 14,066.5 +.78%
  
• Vix 21.0 +1.9%
• Total Put/Call .83 -16.2%
• TRIN/Arms 1.44 +89.5%
  

Wednesday Watch

Night Trading 

• Asian equity indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 114.0 +2.0 basis points. 

• China Sovereign CDS 59.0 +.5 basis point. 
• China Iron Ore Spot 120.0 USD/Metric Tonne +.04%.

• Bloomberg Emerging Markets Currency Index 48.1 +.02%.
• Bloomberg Global Risk-On/Risk Off Index  57.7 +.15%. 
• Bloomberg US Financial Conditions Index .05 unch.
  
• Volatility Index(VIX) futures 22.3 +.25%.
• Euro Stoxx 50 futures +.59%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.10%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• (KBH)/2.85
  

Economic Releases

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -719,830 barrels versus a +1,694,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +703,670 barrels versus a -346,000 barrel decline the prior week. Distillate inventories are estimated to fall by -671,500 barrels versus a -1,427,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +4.0% versus a -12.4% decline prior.

2:00 pm EST

• The Monthly Budget Statement for Dec. is estimated at -$60.0B versus -$21.3B in Nov.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China CPI data report, 10Y T-Note auction and the weekly MBA Mortgage Applications report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by commodity and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Afternoon on US CPI Improvement Hopes, Earnings Optimism, Short-Covering, Metals & Mining/Airline Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.8 -5.1%
• DJIA Intraday % Swing .74%
  
• Bloomberg Global Risk On/Risk Off Index 57,8 +4.3%

• Euro/Yen Carry Return Index 147.2 +.35%

• Emerging Markets Currency Volatility(VXY) 10.8 +.9%

• CBOE S&P 500 Implied Correlation Index 40.4 -5.6% 

• ISE Sentiment Index 75.0 -21.0
  

• Total Put/Call 1.02 +15.9%

• NYSE Arms .72 -44.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.68 +.07%
  

• US Energy High-Yield OAS 367.28 -1.53%
• Bloomberg TRACE # Distressed Bonds Traded 332.0 +25.0
  

• European Financial Sector CDS Index 91.09 +3.35% 
• Credit Suisse Subordinated 5Y Credit Default Swap 418.91 -.01%
  

• Italian/German 10Y Yld Spread 191.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 114.45 +1.7%
  

• Emerging Market CDS Index 232.12 +1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.74 -.84%

• 2-Year Swap Spread 28.5 basis points -.5 basis point
  

• TED Spread 22.25 basis points -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.0 -1.0 basis point
  
• MBS  5/10 Treasury Spread  136.0 unch.
  
• Bloomberg US Agg CMBS Avg OAS 116.0 +1.0 basis point
  
• Avg. Auto ABS OAS .82 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.1 +.13%
• 3-Month T-Bill Yield 4.62% +2.0 basis points
  

• China Iron Ore Spot 119.5 USD/Metric Tonne -.5%
• Dutch TTF Nat Gas(European benchmark) 70.0 euros/megawatt-hour -5.8%

• Citi US Economic Surprise Index -11.4 -2.3 points

• Citi Eurozone Economic Surprise Index 80.1 +3.0 points
  

• Citi Emerging Markets Economic Surprise Index -24.1 -.9 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.44 -.29:  Growth Rate +11.1% -.1 percentage point, P/E 17.0 -.1
  
• Bloomberg US Financial Conditions Index .07 +10.0 basis points
  
• Yield Curve -64.0 basis points (2s/10s) +5.25 basis points
• US Atlanta Fed GDPNow Forecast +4.07% +31.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.24 +2.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 69.7%(+2.6 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 50.1%(+.3 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 140 new infections/100K people(last 7 days total). 8.0%(+0.0 percentage points) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -72.0%(+2.2 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +99 open in Japan 
• China A50 Futures: Indicating +101 open in China

• DAX Futures: Indicating +98 open in Germany

Portfolio:

• Slightly Higher:  On gains in my commodity/tech/industrial/medical sector longs
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +.2%
  

Sector Underperformers:

• 1) Utilities -.7% 2) Disk Drives -.6% 3) Cyber Security -.6%

Stocks Falling on Unusual Volume: 

• AVGO, WM, VET, NTR, BTI, DISH, BRX, KIM, CF, SITC, CRK, UCTT, OHI, UDMY, MERC, HELE, ILMN, ELF, BOX, MIRM, HKD, RVNC, SMCI and EURN
  

Stocks With Unusual Put Option Activity:

• 1) EWC 2) AEO 3) EXAS 4) LQD 5) GPS
  

Stocks With Most Negative News Mentions:

• 1) VORB 2) RYAM 3) AVGO 4) ILMN 5) ON
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.9%

Sector Outperformers:

• 1) Steel +2.2% 2) Airlines +2.1% 3) Alt Energy +1.6%

Stocks Rising on Unusual Volume:

• SHC, OSH, VCEL, LEGN, CECO, ARWR, SIBN, VRDN, ZYXI, NARI, HRMY, BMBL, SNX, ORMP, FGEN and ARVN
  

Stocks With Unusual Call Option Activity:

• 1) IMGN 2) PRTY 3) CROX 4) DRI 5) CL

Stocks With Most Positive News Mentions:

• 1) DATS 2) ACCO 3) SIDU 4) OSH 5) PRE
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -14.0% Below 100-Day Average 
• 8 Sectors Declining, 3 Sectors Rising
• 47.7% of Issues Advancing, 48.1% Declining
• 21 New 52-Week Highs, 4 New Lows
• 45.6%(+2.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.0 -3.0
  
• Bloomberg Global Risk-On/Risk-Off Index 57.6 +3.9%
  
• Russell 1000: Growth/Value 13,922.1 -.21%
  
• Vix 21.2 -3.4%
• Total Put/Call 1.01 +14.8%
• TRIN/Arms .83 -35.7%