Stocks Slightly Lower into Final Hour on Higher Long-Term Rates, Sector Rotation, Technical Selling, Tech/Medical Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.2 +3.1%
• DJIA Intraday % Swing .68 +23.2%
  
• Bloomberg Global Risk On/Risk Off Index 65.0 +.1%

• Euro/Yen Carry Return Index 173.9 -.2%

• Emerging Markets Currency Volatility(VXY) 6.4 -.16%

• CBOE S&P 500 Implied Correlation Index 14.6 +5.2% 

• ISE Sentiment Index 146.0 unch.
  

• Total Put/Call .99 +8.8%

• NYSE Arms .62 -47.5%
  
• NYSE Non-Block Money Flow -$156.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.7 -.03%
  

• US Energy High-Yield OAS 299.8 -.36%
• Bloomberg TRACE # Distressed Bonds Traded 284 -3
  

• European Financial Sector CDS Index 60.7 +.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 191.6 -.55%
  

• Italian/German 10Y Yld Spread 133.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 100.1 -.15%
  

• Emerging Market CDS Index 164.6 -.11%
• Israel Sovereign CDS 118.1 +.02%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.02%

• 2-Year SOFR Swap Spread -11.25 basis points -1.75 basis points
  

• Treasury Repo 3M T-Bill Spread 9.75 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.25 basis point
  
• MBS  5/10 Treasury Spread 145.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 819.0 -8.0 basis points
  
• Avg. Auto ABS OAS 62.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.0 -.04%
• 3-Month T-Bill Yield 5.40% +1.0 basis point
  

• China Iron Ore Spot 107.6 USD/Metric Tonne -4.8%
• Dutch TTF Nat Gas(European benchmark) 24.9 euros/megawatt-hour -5.5%

• Citi US Economic Surprise Index 26.5 -1.3 points

• Citi Eurozone Economic Surprise Index 54.7 +3.3 points

• Citi Emerging Markets Economic Surprise Index 14.8 +.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(495 of 500 reporting) +8.0% +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 247.99 +.39:  Growth Rate +11.1% unch., P/E 20.6 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.82% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +55.2% -2.1 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 316.09 +.34: Growth Rate +31.6% +.6 percentage point, P/E 30.8 -.8
  
• Bloomberg US Financial Conditions Index 1.01 -2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.04 +12.0 basis points
  
• US Yield Curve -43.75 basis points (2s/10s) -1.75 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.5% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.0% +3.3 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.72% unch.: CPI YoY +3.12% unch.
  
• 10-Year TIPS Spread 2.27 -1.0 basis point
  
• Highest target rate probability for May 1st FOMC meeting: 77.5%(+1.6 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 55.2%(-2.2 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -535 open in Japan 
• China A50 Futures: Indicating +52 open in China

• DAX Futures: Indicating +41 open in Germany

Portfolio:

• Slightly Lower:  On losses in my industrial/tech/transport sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.9%
  

Sector Underperformers:

• 1) Disk Drives -2.3% 2) Steel -1.8% 3) Semis -1.7%

Stocks Falling on Unusual Volume: 

• BA, VST, INTA, VRT, IEP, TSM, MRVL, CAMT, CLS, SKYT, WING, EQT, PBPB, VKTX and  PGY
  

Stocks With Unusual Put Option Activity:

• 1) GERN 2) ARQT 3) QRTEA 4) ORCL 5) UAL
  

Stocks With Most Negative News Mentions:

• 1) MRVL 2) RILY 3) BA 4) IRTC 5) LUXH
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.1%
  

Sector Outperformers:

• 1) Gold & Silver +2.3% 2) Electric Vehicles +1.9% 3) Gambling +1.3%

Stocks Rising on Unusual Volume:

• BALY, EH, MSTR, BILI, MRNA, ATEN, PAY, KRO, CRC, RDN, BNTX, BROS, FUTU, MTG, GMAB, CHH, ARIS, AESI, MKTX, APGE, GPS, DQ, TPC and SXC
  

Stocks With Unusual Call Option Activity:

• 1) ERX 2) SLS 3) ARQT 4) HMY 5) SMR

Stocks With Most Positive News Mentions:

• 1) GDS 2) BALY 3) GRPH 4) AMNF 5) AUUD
  

Charts:

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

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (ADM)/1.43
• (IGT)/.52
• (KSS)/1.28
• (ONON)/.11
  

After the Close: 

• None of note
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for Feb. is estimated to rise to 90.5 versus 89.9 in Jan.

8:30 am EST

• The CPI MoM for February is estimated to rise +.4% versus a +.3% gain in Jan.
• The CPI Ex Food and Energy MoM for Feb. is estimated to rise +.3% versus a +.4% gain in Jan.
• Real Avg. Weekly Earnings YoY for Feb.

2:00 pm EST

• The Monthly Budget Statement for Feb. is estimated at -$298.0B versus -$21.9B in Jan.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The 10Y T-Note auction, weekly US retail sales reports, API weekly crude oil stock report, EIA short-term energy outlook report, Cleveland Fed CPI for Feb., OPEC monthly report, Deutsche Bank Media/Internet/Telecom Conference, UBS Consumer/Retail Conference, JPMorgan Industrials Conference, Leerink Biopharma Conference, BofA Consumer/Retail Conference, Citigroup TMT Conference, (CSCO) investor meeting, (TOL) annual meeting and the JPMorgan Industrials Conference 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 -.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.7 +.1
  
• 8 Sectors Declining, 3 Sectors Rising
• 40.3% of Issues Advancing, 56.2% Declining 
• TRIN/Arms .58 -50.9%
  
• Non-Block Money Flow -$207.8M
  
• 82 New 52-Week Highs, 11 New Lows
• 61.8% (+.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 64.0 -9.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 64.3 -1.0%
• Bloomberg Cyclicals/Defensives Pair Index 141.3 -.56%
  
• Russell 1000: Growth/Value 19,004.8 -.03%
• CNN Fear & Greed Index 65.0 (Greed) -9.0
  
• 1-Day Vix 12.1 -3.3%
  
• Vix 15.7 +6.8%
  
• Total Put/Call .98 +7.7%

Monday Watch

Today's Headlines

Bloomberg:

• Global Population Crash Isn't Sci-Fi Anymore.
• China's Slump Is One Big Cloud in Sunny Global Markets.
• Default Risk Fades in Emerging Markets as Riskiest Bonds Soar.
• Asian Stocks Fall, Yen Extends Gain Against Dollar.
• Oil Holds Decline as Investors Look Ahead to US Inflation Print.
• Traders Are on Alert for a Hotter-Than-Expected Inflation Print“.
• Bubble Angst Belied by Big-Tech Weaklings, Broader S&P 500 Gains.
• Reddit’s Planned IPO to Seek Up to $748 Million.
• Bond Traders Eye Key US Inflation Report to Game Out Next Bets.
• One of the Most Infamous Trades on Wall Street Is Roaring Back.
• Five Things You Need to Know to Start Your Day: Asia.
• Five Key Charts to Watch in Global Commodity Markets This Week.

Zero Hedge:

• "Made By China" Is Possibly The Biggest Risk To The Economy, And It Is Staring Us Right In The Face. 
• "Sleazy" Liz Cheney Loses It After Bombshell Report Claims She "Suppressed Exonerating Evidence" With J6 Committee.
• The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum.
• Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support".
• No Borders? No America. 
• Weekend News Round Up - Newsquawk Asia-Pac Market Open.
• David Sacks: "Biden's Big Backfire" Is Ukraine, Warns Of "Woke War III".
• Trump Eviscerates Biden Over 'Apology Tour' After Calling Illegal Alien Murderer An "Illegal".
• US Reinforces Haiti Embassy, Evacuates Some Staff In Overnight Airlift Mission.
• How Biden's Floating Pier For Gaza Paves Way To US Boots On The Ground.
• What is 'The Halving'? Explaining The Most Important Event In Bitcoin's History.
• SpaceX-Backed Flying Car Startup Gets FAA Nod.
• Watch: Crowd Roars As Trump Enters Packed UFC Arena.
• Anti-School-Choice GOPers Massacred In Texas Primary - Vouchers Enacted In Alabama.
• Biden Apologizes For Saying "Illegal" As Trump Hosts Laken Riley's Family At Rally.
• Peter Schiff: Price Controls Are Coming.
• NXXT Golf Bans Transgenders From Female Competitions.
• Tech Funds See Record Weekly Outflow, Just As "AI Chase Trade Becomes Consensus".
• Medicaid Expansion Was Supposed To Pay For Itself, Instead Hospitals Are Closing.
• What A Trip: Psychedelic Medicine Company MindMed Shares Rocket 50% After Positive Data.
• Trump Meets With Hungarian Leader Viktor Orban, Discussions Focus On Border Security.
• "Madness!": West Is Conducting "All-Out Militarization" To Defeat Russia, Serbian President Warns.
• US Proxies Fear 'Afghanistan-Style' Withdrawal From Syria.
• Are Voters Recoiling Against Disorder?
• Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence.
• China Plans $27BN 'Big Fund' To Counter US' Tech War.
• COVID Showed Us Who Really Rules America.

Wall Street Journal:

• Chasing Passive Income, Americans Turn to Vending Machines.
• Bid to Pause Israel-Hamas War Falters Before Ramadan Starts. 
  
• Why Biden’s Agenda Is Filled With Old Ideas.
• GM Doesn’t Tell the Truth About EVs. If the U.S. and allies become failed states, blame their energy and climate delusions.
• Two Canals, Two Big Problems—One Global Shipping Mess.
• Surge Pricing Is Coming to More Menus Near You.
• Life at Regional and Small Banks, a Year After SVB Failed.
• Wall Street Predicted a Blockbuster. Now the Drug May Be Withdrawn.

CNBC:

• Why Walmart’s quick success in generative AI search should have Google worried.
• Pfizer is betting on cancer drugs to turn business around after Covid decline – here’s what to know.
• Japan averts technical recession as revised fourth-quarter data shows economy grew 0.4%.

Reuters:

• Nvidia is sued by authors over AI use of copyrighted works.
• China warns overall pressure on employment yet to ease.

MarketWatch.com:

• 25 of the best-performing stocks in the S&P 500 appear to be better values than they were a year ago. Nvidia is one of them.
• Feds reportedly open criminal investigation into Boeing 737 Max midair blowout.
• Saudi oil giant Aramco posts $121 billion annual profit, down from 2022 record.

NewsMax:

• Sen. Tim Scott: Next Senate GOP Leader Must Be Trump Ally.

Fox News:

• IBM vice chair delivers reality check on Biden's jab at billionaires during SOTU.
• Jan. 6 committee allegedly suppressed testimony on Trump push for National Guard.
• Speaker Johnson chastises Biden for apology to Laken Riley murder suspect.
• FDNY responds to allegations witch hunt underway to ID firefighters who cheered Trump.

TheGatewayPundit.com:

• Schiff Says Intel Community will Sabotage Trump By Withholding Intelligence and ‘Dumbing Down’ Daily Brief (VIDEO).
• J6 Political Hostages Ryan Samsel And Jake Lang Moved To Gang Units In Same Jail System Where Esptein Was Killed: ‘The DOJ Set Them Up To Get Stabbed And Beaten’.
• Government Launches Holy War on Pastor for Home-Churching.
• Turkey’s Erdogan Says Country ‘Firmly’ Backs Hamas Terrorists, Likens Netanyahu to Hitler.
• Liberal Paradise: Calif. Woman, 96, Murdered While Preparing Cookies for Own Birthday.
• HORROR: White Female Student in Critical Condition with Brain Injury After Being Beaten by Mob Near St. Louis High School (VIDEO).
• Crime Pays in New York: Proposed Bill Would Pay Inmates $2600 After They Leave Prison.
• US Deploys Marines to American Embassy in Haiti – Non-Essential Personnel Evacuated in the Midst of Chaos in the Capital Port-Au-Prince.
• Madonna Scolds Fan for Not Standing During LA Concert Before Noticing Fan is in Wheelchair.
• Oklahoma County Republicans Officially Censure RINO Senator James Lankford Over Failed Border Security Deal.
• UFC 299 Goes Wild as Former President Trump Enters Arena — “F*ck Joe Biden” Chant Erupts in Miami (VIDEO).
• Hospital Pays Job Applicant Who Refused Mandated Flu Shot.
• Pope Francis Says Ukraine Should Surrender, Urges Zelensky to ‘Show Courage of the White Flag’.
• A Permanent Daylight Savings Is Being Pushed By U.S Senators Again.
• President Trump Spent Time with Laken Riley’s Family and Friends at Rome, Georgia Rally.
• President Trump Rips Joe Biden at Rally in Rome, Georgia: “Joe Biden Should Not be Shouting Angrily at America. America Should be Shouting Angrily at Joe Biden.” (VIDEO).

The Epoch Times:

• Hong Kong’s Property Problems Reflect Beijing’s Mismanagement.
• Hong Kong’s New National Security Bill Includes Stiff Penalties and More Power to Suppress Dissent.

X:

• @WideAwakeMedia

• Meteorologist and founder of the Weather Channel, John Coleman, utterly demolishes the “man-made climate change" narrative, in under three minutes. "There is no significant man-made global warming now, there hasn’t been any in the past and there’s no reason to expect any in the future." "The government puts out about $2.5 billion for climate research every year. It only gives that money to scientists who will produce scientific results that support the global warming hypothesis." (video)
• Not content with the damage caused by mRNA Covid "vaccines", which he admits "[do not] block you from getting infected", Bill Gates is excited about the development of mRNA vaccines for cancer, measles, tuberculosis, HIV and even animal vaccines. "[mRNA vaccines are] a treasure to the world." (video)

• @StillGray
  

• So let’s get this straight, Biden is setting up a semi-permanent port/base in Gaza that will staff over a thousand full time service members as some sort of stationary point for aid delivery and possible migration point for refugees to emigrate into the US. (video)
  

• @WendyP4545

• How many times did I warn you that the Omnibus was full of traps for Trumps presidency? According to this, Ukraine get's funding into infinity and if Trump tries to stop it, it triggers an automatic Impeachment. Vacate the damn chair
  @RepMattGaetz. (pic)

• @CraigKellyPHON

• WHAT A SCAM. Professor Norman Fenton exposes the fraud & statistical tricks used by the vaccine fanatics to falsely claim efficacy of the injections. The trick was to classify those injected within the previous 14-28 days as "unvaccinated". This way, those injured by the vaccine and report their injury 14-28 after being injected are falsely classified as "unvaccinated" - thereby hiding the cause of their injury and creating a fake impression of efficacy. Just another part of the Covid scam. (pic)

• @WallStreetApes

• Dan Bongino Put Together A Collection Of Clips Showing Barack Obama, Hillary Clinton & Prominent Democrats All Openly Call Out America’s DEEPLY FLAWED Election System. Watch Democrats Commit The Same Crime, Questioning Elections, That They Relentlessly Persecuted Donald Trump For. (video)
• American Farmers Are Using The Internet To Warn Everyone That Our Food Is Being Genetically Modified By Big Food. “Did you know over 90% of the field corn grown in the US is GMO genetically modified? That's used in corn, grit meals, and all kind of processed foods”. (video)
  

• @TonyClimate

• Antarctic sea ice extent is higher today (3,165,625 km.sq.) than it was 27 years ago (3,075,000 km.sq.) (pic)

• @TheChiefNerd

• Sen. Rand Paul on Fauci’s Long History of Bioweapons Research. “One of the most alarming quotes which really tells you who Anthony Fauci is, is in 2012 he was asked about this and he says, ‘There are some risks. A pandemic could occur from these experiments but the knowledge is worth the risk.’…These are people getting paid billions of dollars and Robert Kennedy has recounted this better than anyone else, the connection to bioweapons trade.” (video)

• @VigilantFox

• The flooding of illegal immigrants into this country is intentional and being done ON PURPOSE! How can we be sure? “They’re setting up cots and community centers across the country for [illegal] immigrants, but not for people who live here, not the veteran homeless people, not the regular homeless people, not any.” So, they have tax dollars for illegal immigrants, but if you’re homeless in this country, tough luck. (video)

• @Real_RobN

• And here is, TRUMP vs. RICO why Fulton County REFUSED to VERIFY SIGNATURES. Dominion Log Files CONFIRM: Virtually all 148,000 Fulton County’s 2020 mail in ballots were forced to adjudication.

• @BehizyTweets

• BREAKING: Sheriff Dar Leaf reveals he has been investigating key players in the Michigan 2020 election including Dominion CEO John Poulos, Dominion employees and contractors, Jocelyn Benson, AG Dana Nessel, and others.

• @WallStreetSilv

• BREAKING: Haiti has descended into cannibal gangs chasing people around and taking over police station. Their Prime Minister has fled the country. (video)

• @BGatesIsaPsycho

• Agenda 2030. Want to understand what Agenda 2030 is? Then watch this. “179 different countries have signed up to this plan in which the World will develop into a totalitarian state under one Government” (video)
  

• @LibsofTiktok

• ICE just arrested this Honduran National in RI who’s wanted for m*rder and was convicted of a felony ass*ult charge. He entered our country illegally in 2021. ICE requested to detain him but the court released him because Rhode Island is a Sanctuary State. In 2014, a Democrat Governor made Rhode Island a Sanctuary State.

• @_aussie17

• From Italy 9 March, 2024 COVID, THE RECKONING. An 18-year-old dies from the vaccine: five doctors under investigation for Camilla. The Genoa Prosecutor's Office is also accusing four of them of manslaughter. (pic)
  

• @BigFish3000

• You are not allowed to investigate any aspect of the election. Sheriff speaks out about their silencing tactics in Michigan. (pic)

OpenVAERS: 

• VAERS US COVID Vaccine Adverse Event Reports. 1,007,636 Reports(+4,460 from prior report) Through February 23th, 2024.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Night Trading

• Asian indices are -1.5% to -.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 100.0 -1.25 basis points.
  
• China Sovereign CDS 66.25 +.25 basis point.
• China Iron Ore Spot 112.8 USD/Metric Tonne -2.1%.
  
• Bloomberg Emerging Markets Currency Index 40.1 +.02%
• Bloomberg Global Risk-On/Risk Off Index 65.7 +1.1%.
• Volatility Index(VIX) futures 15.9 -.3%. 
• Euro Stoxx 50 futures -.42%.
• S&P 500 futures -.05%.
• NASDAQ 100 futures -.14%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by industrial and technology 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 week.