Thursday, January 25, 2024

Friday Watch

Evening Headlines

Bloomberg: 

Zero Hedge:

Wall Street Journal:

MarketWatch.com:
TheGatewayPundit.com:

The Epoch Times:

X:
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.5% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 98.75 +.25 basis point.
  • China Sovereign CDS 64.0 +.25 basis point.
  • China Iron Ore Spot 134.3 USD/Metric Tonne -.8%.
  • Bloomberg Emerging Markets Currency Index 40.8 -.08%.
  • Bloomberg Global Risk-On/Risk Off Index 62.9 -.8%.
  • Volatility Index(VIX) futures 14.4 +1.2%.
  • Euro Stoxx 50 futures +.17%.
  • S&P 500 futures -.25%.
  • NASDAQ 100 futures -.67%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial 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 Close on US Economic Data, Lower Long-Term Rates, Earnings Outlook Optimism, Transport/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.5 +2.4%
  • DJIA Intraday % Swing .57% +54.3%
  • Bloomberg Global Risk On/Risk Off Index 63.5 -.8%
  • Euro/Yen Carry Return Index 172.7 -.3%
  • Emerging Markets Currency Volatility(VXY) 7.41 -.54%
  • CBOE S&P 500 Implied Correlation Index 17.3 -1.2% 
  • ISE Sentiment Index 133.0 -1.0
  • Total Put/Call .93 -3.1%
  • NYSE Arms 1.04 -29.3% 
  • NYSE Non-Block Money Flow +$135.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.08 -1.3%
  • US Energy High-Yield OAS 320.53 -.77%
  • Bloomberg TRACE # Distressed Bonds Traded 311 -20
  • European Financial Sector CDS Index 67.72 -.78% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 198.9 +.09%
  • Italian/German 10Y Yld Spread 154.0 basis points -2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 99.8 -1.1%
  • Emerging Market CDS Index 179.1 -.47%
  • Israel Sovereign CDS 123.2 -.24%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.49 +.2%
  • 2-Year SOFR Swap Spread -15.0 basis points -1.25 basis points
  • Treasury Repo 3M T-Bill Spread 5.0 basis points -1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.75 -.5 basis point
  • MBS  5/10 Treasury Spread 145.0 -4.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 912.0 -5.0 basis points
  • Avg. Auto ABS OAS 71.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.9 -.11%
  • 3-Month T-Bill Yield 5.35% -1.0 basis point
  • China Iron Ore Spot 134.3 USD/Metric Tonne -.8%
  • Dutch TTF Nat Gas(European benchmark) 27.78 euros/megawatt-hour -4.0%
  • Citi US Economic Surprise Index 25.3 +8.7 points
  • Citi Eurozone Economic Surprise Index -10.5 -6.2 points
  • Citi Emerging Markets Economic Surprise Index 1.9 +1.6 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(83 of 500 reporting) -3.6% -2.3 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.94 +.05:  Growth Rate +10.2% unch., P/E 20.0 -.1
  • S&P 500 Current Year Estimated Profit Margin 11.63% -4.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) -16.6% n/a percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 294.68 +1.57: Growth Rate +38.1% +.7 percentage point, P/E 31.5 +.7
  • Bloomberg US Financial Conditions Index 1.01 +5.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .77 +53.0 basis points
  • US Yield Curve -18.75 basis points (2s/10s) +1.75 basis points
  • US Atlanta Fed 4Q GDPNow Forecast +2.38% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 64.1% -.9 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +2.96% unch.
  • 10-Year TIPS Spread 2.29 -1.0 basis point
  • Highest target rate probability for March 20th FOMC meeting: 50.7%(-8.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for May 1st meeting: 50.3%(-2.9 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -156 open in Japan 
  • China A50 Futures: Indicating -48 open in China
  • DAX Futures: Indicating +103 open in Germany
Portfolio:
  • Higher:  On gains in my tech/industrial/biotech/consumer discretionary/utility sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth -.2%
Sector Underperformers:
  • 1) Healthcare Providers -2.3% 2) Electric Vehicles -1.6% 3) Regional Banks -.8%
Stocks Falling on Unusual Volume: 
  • KURA, CVS, PYPL, UNH, BA, NOC, HXL, CRS, FFWM, VIRT, DWAC, ORI, HUM, CNXC, HZO and COLB
Stocks With Unusual Put Option Activity:
  • 1) DHR 2) IOVA 3) BKR 4) LQDA 5) CRON
Stocks With Most Negative News Mentions:
  • 1) COLB 2) FSR 3) HUM 4) KRNY 5) VIRT
Charts:

Bull Radar

Style Outperformer:

  • Mid-Cap Value +.6%
Sector Outperformers:
  • 1) Computer Services +5.7% 2) Airlines +3.0% 3) Homebuilders +1.5%
Stocks Rising on Unusual Volume:
  • VERA, AMSC, ALPN, URI, XRX, IBM, AAL, NEP, BANC, WEAV, HRI, RMD, BANC, BFH, KMPR, IMNM, TEX, TAL, KYMR, CMPS, EDU, NTCT, VCEL, GGAL, BMA, ALK, PUBM, LBRT, PKG, CMCSA, ALGT, GCT, MKC, DAL, PARA, MTCH, FUSN, CPA, EIX, UAL, OSK and IPGP
Stocks With Unusual Call Option Activity:
  • 1) IBM 2) LVS 3) URI 4) STX 5) NOW
Stocks With Most Positive News Mentions:
  • 1) IBM 2) URI 3) RMD 4) VERA 5) WRB

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (AXP)/2.64
  • (ALV)/3.36
  • (BMI)/.82
  • (BKU)/.69
  • (BAH)/1.14
  • (CL)/.85
  • (FTS)/.53
  • (GNTX)/.44
  • (NSC)/2.87
After the Close: 
  • None of Note
Economic Releases

8:30 am EST

  • Personal Income for Dec. is estimated to rise +.3% versus a +.4% gain in Nov.
  • Personal Spending for Dec. is estimated to rise +.5% versus a +.2% gain in Nov. 
  • The PCE Core Deflator MoM for Dec. is estimated to rise +.2% versus a +.1% gain in Nov.

10:00 am EST

  • Pending Home Sales MoM for Dec. is estimated to rise +2.0% versus unch. in Nov.

11:00 am EST

  • The Kansas City Fed Services Activity Index for Jan.

Upcoming Splits 

  • (HUBG) 2-for-1
Other Potential Market Movers
  • The Dallas Fed PCE for Dec., Atlanta Fed GDPNow Q1 Update, Bloomberg US Economic Survey for Jan., CFTC Speculative Net Positioning reports, US Baker Hughes Rig Count and the American Society of Clinical Oncology Genitourinary Cancers Symposium could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

  • Volume Running +9.8% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 10.5 +1.3
  • 2 Sectors Declining, 9 Sectors Rising
  • 70.3% of Issues Advancing, 27.5% Declining 
  • TRIN/Arms 1.21 -17.7% 
  • Non-Block Money Flow +$153.5M
  • 82 New 52-Week Highs, 14 New Lows
  • 61.3%(+1.3%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 58.0 -3.0
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 64.1 +.1%
  • Bloomberg Cyclicals/Defensives Pair Index 139.5 +.5%
  • Russell 1000: Growth/Value 19,203.0 -.07%
  • CNN Fear & Greed Index 77.0 (Extreme Greed) unch.
  • 1-Day Vix 9.3 -13.8%
  • Vix 13.4 +1.8%
  • Total Put/Call .84 -12.5%