Stocks Rising into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Commodity/Telecom 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) 13.0 -.4%
• DJIA Intraday % Swing .78 +79.5%
  
• Bloomberg Global Risk On/Risk Off Index 65.1 +1.3%

• Euro/Yen Carry Return Index 182.9 +.3%

• Emerging Markets Currency Volatility(VXY) 6.97 +.58%

• CBOE S&P 500 Implied Correlation Index 16.7 +.7% 

• ISE Sentiment Index 151.0 +12.0
  

• Total Put/Call .85 -11.5%

• NYSE Arms 1.06 +26.2%
  
• NYSE Non-Block Money Flow +$70.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 50.4 +.01%
  

• US Energy High-Yield OAS 260.79 +1.6%
• Bloomberg TRACE # Distressed Bonds Traded 280 +1
  

• European Financial Sector CDS Index 59.5 +.12%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 179.9 -1.4%
  

• Italian/German 10Y Yld Spread 134.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 103.2 +.46%
  

• Emerging Market CDS Index 161.89 -.24%
  
• Israel Sovereign CDS 129.3 +4.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.64 +.16%

• 2-Year SOFR Swap Spread -8.25 basis points +.25 basis points
  

• Treasury Repo 3M T-Bill Spread 9.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.0 unch.
  
• MBS  5/10 Treasury Spread 140.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 753.0 -5.0 basis points
  
• Avg. Auto ABS OAS 59.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.7 +.08%
• 3-Month T-Bill Yield 5.40% +1.0 basis point
  

• China Iron Ore Spot 115.4 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 30.9 euros/megawatt-hour +.8%

• Citi US Economic Surprise Index -11.5 -4.1

• Citi Eurozone Economic Surprise Index 25.0 -.7 point

• Citi Emerging Markets Economic Surprise Index 27.4 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(455 of 500 reporting) +5.5% +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 255.13 +.20:  Growth Rate +14.4% +.1 percentage point, P/E 20.4 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.91% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +37.2% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 325.75 +.26: Growth Rate +35.6% +.1 percentage point, P/E 31.1 -.2
  
• Bloomberg US Financial Conditions Index 1.13 unch.
  
• Bloomberg Euro-Zone Financial Conditions Index 1.03 -4.0 basis points
  
• US Yield Curve -36.0 basis points (2s/10s) -1.0 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +4.2% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 46.5% -.5 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% unch.
  
• 10-Year TIPS Spread 2.34 +1.0 basis points
  
• Highest target rate probability for July 31st FOMC meeting: 65.1%(-3.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 48.8%(-.1 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +361 open in Japan 
• China A50 Futures: Indicating +81 open in China

• DAX Futures: Indicating +151 open in Germany

Portfolio:

• Higher:  On gains in my financial/consumer discretionary/biotech/industrial 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 +.3%
  

Sector Underperformers:

• 1) Computer Services -3.1% 2) Semis -.5% 3) Disk Drives -.4%

Stocks Falling on Unusual Volume: 

• PWSC, RCM, TARS, AZTA, HOOD, DOX, ABR, PAR, PZZA, MSGE, WMG, ABNB, ALGM, ACAD, EXAS, HMN, UTI, PYCR, METC, DUOL, RBLX, FWRD and EPAM
  

Stocks With Unusual Put Option Activity:

• 1) BMBL 2) PTEN 3) DBX 4) RBLX 5) ZI
  

Stocks With Most Negative News Mentions:

• 1) EPAM 2) BYND 3) FWRD 4) GDRX 5) ABNB
  

Sector ETFs With Most Negative Money Flow:

• 1) SOXX 2) XLK 3) XLP 4) IBB 5) KRE

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.8%
  

Sector Outperformers:

• 1) Telecom +3.3% 2) Gold & Silver +2.7% 3) Shipping +2.3%

Stocks Rising on Unusual Volume:

• CCSI, SITM, EMBC, AGS, BLBD, ZLAB, PGY, VITL, ARHS, TDS, WRBY, USM, APP, SBGI, UPST, YETI, SPB, ESTA, KVYO, BMBL, EQIX, EYPT, ZIMV, CELH, ATEC, ALCC, FVRR, PLNT, ZIM, PAAS, INOD, CARS, HPK, MRC, CDNA, PETQ, STE, NOMD, CAKE, HIMS, HG, PRMW, SN, MCS, SIX, PRIM, IMXI, HASI, MNRO, NTR, BLDR, YOU, FOUR and RXST
  

Stocks With Unusual Call Option Activity:

• 1) CI 2) SYF 3) CDLX 4) PLNT 5) RBLX

Stocks With Most Positive News Mentions:

• 1) BLBD 2) VITL 3) APP 4) YETI 5) EQIX
  

Sector ETFs With Most Positive Money Flow:

• 1) XLV 2) XLF 3) SMH 4) PPH 5) PAVE
  

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:

• (CLMT)/-.82
• (ENB)/.60
• (NVAX)/-1.06
  

After the Close: 

• None of note
  

Economic Releases

10:00 am EST

• Univ. of Mich. Consumer Sentiment for May is estimated to fall to 76.2 versus 77.2 in April.
• Univ. of Mich. 1Y Inflation Expectations Index for May is estimated to rise +3.2% versus a +3.2% gain in April.
  

2:00 pm EST

• The Monthly Budget Statement for April is estimated at $250B versus $176.2B in March.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Bowman speaking, Fed's Barr speaking, Fed's Goolsbee speaking, US Baker Hughes rig count, CFTC speculative net positioning reports, WASDE report, American Society of Gene/Cell Therapy Meeting, (MAR) annual meeting, (ALV) annual meeting, (AXON) annual meeting, (VMC) annual meeting, (CL) annual meeting, (PGR) annual meeting, (AA) annual meeting, (AKAM) annual meeting and the (ZBH) annual meeting 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 -9.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.0 +1.3
  
• 1 Sector Declining, 10 Sectors Rising
• 66.3% of Issues Advancing, 31.3% Declining 
• TRIN/Arms 1.20 +42.9%
  
• Non-Block Money Flow +$86.4M
  
• 145 New 52-Week Highs, 15 New Lows
• 59.7% (+2.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 +4.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 65.2 +1.4%
• Bloomberg Cyclicals/Defensives Index 240.33 -.37%
  
• Russell 1000: Growth/Value 19,067.6 -.42%
• CNN Fear & Greed Index 42.0 (Fear) +3.0
  
• 1-Day Vix 8.2 -7.5%
  
• Vix 13.1 +1.0%
  
• Total Put/Call .83 -13.5%

Thursday Watch

Evening Headlines

Bloomberg:

• Biden Warns He’d Hold Back More Weapons If Israel Invades Rafah.
• Japan’s Real Wages Slide, While Underlying Trend Stays Solid.
• Hawkish Singapore Policy, Cooling Inflation a Tailwind for Bonds.
• Singapore Must Recognize Stock-Market Challenges, Wong Says.
• Yen’s Fragility Raises Specter of a New Currency War in Asia.
• Bond Losses Extend to Asia as Stocks Tread Water.
• Oil Ticks Higher as Traders Digest Mixed US Inventory Snapshot.
• Billions in Phantom Debt Is Lurking In ‘Buy Now, Pay Later’ Services. 
• Texas Power Prices Jump 70-Fold as Outages Raise Shortfall Fears.

Zerohedge:  

• The "Soft Landing" Lie: A Global Economic Slowdown Is Already Underway.
• Another Trump Trial Derailed: Fani-Donating Judge's Decision To Keep Her On RICO Trial Under Scrutiny By Appeals Court.
• Jan. 6 Arrests Running At Nearly Double The Rate Of 2023 And 2022: Report.
• Philadelphia Mayor Starts Long-Awaited Process Of Cleaning Out City's Open Air Drug Markets.
• Democrats Join "Republicans" To Block Greene's Bid To Oust Speaker Johnson.
• Office Tower Turmoil In NYC Worsens Ahead Of Trillion Dollar Maturity Wall .
• Gen-Zers Slide Deeper Into Debt As Bidenomics Failure Crushes America's Future Leaders.
• US stocks were indecisive amid light catalysts, mixed earnings and geopolitical uncertainty - Newsquawk Asia-Pac Market Open.
• AstraZeneca Pulls COVID Vaccine After Admitting Side Effect.
• Be Careful What You Wish For: Weaker Yen A Blessing And A Curse For Japan.
• Disney Cast Biological Male As "Evil Queen" At Florida Wilderness Lodge, Outraged Father Claims.
• When "Making It" Becomes Hopeless.
• ARM Loses Leg After Downbeat Annual Revenue Forecast.
• Markets meander in search of the next catalyst - Newsquawk US Market Wrap.
• Bond Yields & Black Gold Bounce As Hawkish FedSpeak Slows Stocks.

Wall Street Journal:

• The Gap Between the Price You See and What You Pay Is Getting Worse.
• Conservative Judges Plan to Blackball Columbia University Graduates.
• Public School Leaders Spar With Congress Over Antisemitism.
• Neuralink’s First Brain-Chip Implant in a Human Appeared Flawless. There Was a Problem.
• GM Is Shutting Down the Chevy Malibu After 60 Years.
• China’s Xi Enjoys Embrace of Serbia and Hungary, Europe’s Renegades.
• Microsoft to Invest Over $3 Billion to Build AI in Wisconsin.
• Lenders Are Seeing a Bottom for Consumers.

CNBC.com:

• Google employees question execs over ‘decline in morale’ after blowout earnings.
• Disney, Warner Bros. Discovery to bundle streaming services.
• U.S. eyes curbs on China’s access to AI software behind apps like ChatGPT.
• Airbnb beats earnings expectations for first quarter but offers weaker-than-expected guidance.
• AI needs to keep cool—literally. That’s driving demand for these infrastructure companies.

MarketWatch.com: 

•  Arm crushes earnings expectations, but stock falls as forecast lacks wow factor.

Fox News:

• Biden threatens to withhold weapons if Netanyahu goes forward with Rafah invasion.
• Illegal migrants won't leave tent city, send list of 13 demands to Dem mayor.
• Former White House economist issues dire market warning over potential Trump conviction.

TheGatewayPundit.com:

• Disgraced Ex-CNN Anchor Chris Cuomo Now Admits to Taking Ivermectin Daily — Refuses to Apologize for Shaming People Who Didn’t Take the Experimental Shot.
• EXCLUSIVE: The Left’s ELECTION INDUSTRIAL COMPLEX Discovered and Defined.
• “Voters Trust Trump More on the Economy” – OUCH! CNN Airs Brutal 2-Minute Takedown of Joe Biden as Erin Burnett Hurls Fact-Checks to His Face (VIDEO).
• Victor Reacts: Hate Speech Laws are Criminalizing the Truth (VIDEO).
• Decline of Senior Officer Integrity and Civilian Control of the Military.
• Trump Leads Biden in State that Republicans Haven’t Won at Presidential Level Since 1972.
• AstraZeneca Announces Worldwide Withdrawal of COVID-19 Vaccine.
• ‘Hundreds of Millions of Americans’ Have Strong Message for Woke Disney.
• South Carolina Republicans Join Democrats to Block Amendment Preventing Distribution of Voter Registration Forms to Non-Citizens.
• Another January 6 Defendant Dies by Suicide: J6er David Homol Tragically Takes His Own Life Three Months After Biden Regime Raid, Indictment.
• Illegal Alien Who Murdered Laken Riley Indicted By Grand Jury, Accused of Being a “Peeping Tom”.
• YouTube Censors Eva Vlaardingerbroek’s Viral ‘Great Replacement’ CPAC Speech… Still Has 55 Million Views on X!
• BREAKING: Documents Reveal US State Department Officials Knew COVID Leaked From a Wuhan Lab and CCP Covered It Up Back in July 2020 – Then They Lied to the American Public for Years!

The Epoch Times:

• Why Beijing Is Worried About the Japanese Yen.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 1,009,553 Reports(+1,917 from prior report) Through March 29th, 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 equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 104.0 +2.0 basis points.

• China Sovereign CDS 65.0 +2.0 basis points.
  
• China Iron Ore Spot 116.6 USD/Metric Tonne +1.7%.

• Bloomberg Emerging Markets Currency Index 39.6 -.13%.
• Bloomberg Global Risk-On/Risk Off Index 64.3 -.02%.
• Volatility Index(VIX) futures 14.6 +.05%.
• Euro Stoxx 50 futures unch.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.11%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted 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.