Thursday Watch

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.5 -1.0 basis point.

• China Sovereign CDS 66.0 +.75 basis point.
  
• China Iron Ore Spot 106.5 USD/Metric Tonne +.9%.

• Bloomberg Emerging Markets Currency Index 40.0 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 68.4 +.9%.
• Volatility Index(VIX) futures 15.0 -.24%.
• Euro Stoxx 50 futures -.1%

• S&P 500 futures +.07%.

• NASDAQ 100 futures +.19%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by healthcare and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Reversing Slightly Higher into Afternoon on Earnings Outlook Optimism, Short-Covering, Technical Buying, Commodity/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.8 -.22%
• DJIA Intraday % Swing .41 -20.1%
  
• Bloomberg Global Risk On/Risk Off Index 68.0 +.6%

• Euro/Yen Carry Return Index 175.1 +.2%

• Emerging Markets Currency Volatility(VXY) 6.2 -2.7%

• CBOE S&P 500 Implied Correlation Index 12.0 -2.4% 

• ISE Sentiment Index 158.0 +30.0
  

• Total Put/Call .73 -31.1%

• NYSE Arms .81 -28.3%
  
• NYSE Non-Block Money Flow +$107.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 48.0 -1.4%
  

• US Energy High-Yield OAS 290.5 -1.8%
• Bloomberg TRACE # Distressed Bonds Traded 271 -5
  

• European Financial Sector CDS Index 58.9 -1.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 182.0 -2.6%
  

• Italian/German 10Y Yld Spread 123.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 99.4 -.5%
  

• Emerging Market CDS Index 159.9 -1.9%
• Israel Sovereign CDS 114.5 +.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 unch.

• 2-Year SOFR Swap Spread -11.0 basis points +.5 basis point
  

• Treasury Repo 3M T-Bill Spread 9.0 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.0 unch.
  
• MBS  5/10 Treasury Spread 142.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 816.0 -3.0 basis points
  
• Avg. Auto ABS OAS 62.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.06 +.20%
• 3-Month T-Bill Yield 5.39% unch.
  

• China Iron Ore Spot 106.0 USD/Metric Tonne +.4%
• Dutch TTF Nat Gas(European benchmark) 24.9 euros/megawatt-hour +.5%

• Citi US Economic Surprise Index 29.7 +.7 point

• Citi Eurozone Economic Surprise Index 51.4 -4.8 points

• Citi Emerging Markets Economic Surprise Index 17.3 +1.0 point
• S&P 500 Current Quarter EPS Growth Rate YoY(497 of 500 reporting) +7.9% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 248.17 +.11:  Growth Rate +11.2% +.1 percentage point, P/E 20.8 unch.
  
• 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% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 316.27 +.16: Growth Rate +31.6% unch., P/E 31.1 -.1
  
• Bloomberg US Financial Conditions Index 1.12 +20.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.11 +6.0 basis points
  
• US Yield Curve -43.0 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) 56.5% -4.5 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.78% unch.: CPI YoY +3.33% unch.
  
• 10-Year TIPS Spread 2.30 unch.
  
• Highest target rate probability for May 1st FOMC meeting: 87.6%(-2.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 58.0%(-4.6 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -240 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio:

• Higher:  On gains in my industrial/transport/consumer discretionary/biotech sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.1%
  

Sector Underperformers:

• 1) Semis -2.2% 2) Restaurants -1.4% 3) Alt Energy -.9%

Stocks Falling on Unusual Volume: 

• TBBK, GEHC, SLN, MRVL, IGT, LBRT, CYRX, X, DLTR and NMRA
  

Stocks With Unusual Put Option Activity:

• 1) EVA 2) DLTR 3) WSM 4) INDA 5) MP
  

Stocks With Most Negative News Mentions:

• 1) X 2) SURG 3) ZIM 4) NOVA 5) EVA
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%
  

Sector Outperformers:

• 1) Gold & Silver +3.0% 2) Energy +2.7% 3) Homebuilding +1.4%

Stocks Rising on Unusual Volume:

• WSM, WEST, QFIN, SCCO, MSTR, BGNE, PGY, MNSO, TECK, ONON, SG, FCX, ERO, RH, KB, ARHS, EVER, PUBM, LEGN, BIDU, ZTO, PDD, PHIN, ATMU, SUPN, JD, MMM, PAY, FULC, SBOW and AL
  

Stocks With Unusual Call Option Activity:

• 1) TIGR 2) BMEA 3) FTI 4) DLTR 5) PBF

Stocks With Most Positive News Mentions:

• 1) WSM 2) SKIN 3) KTRA 4) NCNA 5) YMM
  

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:

• (DKS)/3.36
• (DG)/1.73
• (GIII)/.68
• (WB)/.50
  

After the Close: 

• (ADBE)/4.38
• (BLNK)/-.31
• (PD)/.15
• (ULTA)/7.53
• (ZUMZ)/.26
• (CSIQ)/.00
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for Feb. is estimated to rise +.8% versus a -.8% decline in Jan.
• Retail Sales Ex Autos MoM for Feb. is estimated to rise +.5% versus a -.6% decline in Jan.
• Retail Sales Ex Autos and Gas for Feb. is estimated to rise +.3% versus a -.5% decline in Jan. 
• PPI Final Demand MoM for Feb. is estimated to rise +.3% versus a -.5% decline in Jan.
• PPI Ex Food and Energy MoM for Feb. is estimated to rise +.2% versus a +.5% gain in Jan.
• Initial Jobless Claims for last week is estimated to rise to 218K versus 217K the prior week.
• Continuing Claims is estimated to fall to 1905K versus 1906K prior.
  

10:00 am EST

• Business Inventories for Jan. is estimated to rise +.2% versus a +.4% gain in Dec.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Balance Sheet report, weekly EIA natural gas inventory report, IEA Monthly report, JPMorgan Gaming/Lodging/Restaurant/Leisure Management Forum, UBS Consumer/Retail Conference, Gabelli Specialty Chemicals Symposium, JPMorgan Industrials Conference, BofA Information/Business Services Conference, (FFIV) annual meeting, (BOX) analyst day, (GILD) investor meeting, (A) annual meeting and the BofA Refining Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +2.0% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.6 -2.4
  
• 1 Sector Declining, 10 Sectors Rising
• 66.7% of Issues Advancing, 30.2% Declining 
• TRIN/Arms .64 -43.4%
  
• Non-Block Money Flow +$66.5M
  
• 221 New 52-Week Highs, 17 New Lows
• 62.4% (+2.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 73.0 +2.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 67.6 +.06%
• Bloomberg Cyclicals/Defensives Pair Index 141.8 +.06%
  
• Russell 1000: Growth/Value 18,981.8 -.8%
• CNN Fear & Greed Index 69.0 (Greed) -5.0
  
• 1-Day Vix 9.4 -10.5%
  
• Vix 13.9 +.4%
  
• Total Put/Call .71 -33.0%