Wednesday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 74.5 -2.75 basis points.

• China Sovereign CDS 56.25 -1.0 basis point.
  
• China Iron Ore Spot 103.9 USD/Metric Tonne -.8%

• Bloomberg Emerging Markets Currency Index 37.0 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 73.5 +.8%.
• Volatility Index(VIX) futures 16.5 -.2%.
• Euro Stoxx 50 futures +.27%.

• S&P 500 futures +.25%.

• NASDAQ 100 futures +.57%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Earnings Outlook Optimism, Falling Long-Term Rates, Short-Covering, Tech/Biotech Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.0 +.04%
• 3-Month T-Bill Yield 4.30% unch.
  

• China Iron Ore Spot 103.9 USD/Metric Tonne -.9%
• Dutch TTF Nat Gas(European benchmark) 50.02 euros/megawatt-hour +4.5%

• Citi US Economic Surprise Index 20.6 -2.2 points
  

• Citi Eurozone Economic Surprise Index -24.2 -4.3 points

• Citi Emerging Markets Economic Surprise Index 8.7 +3.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(47 of 500 reporting) +20.1% -1.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.28 +.54:  Growth Rate +15.1% +.2 percentage point, P/E 22.0 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.28% -8.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 396.95 +.62: Growth Rate +26.6% +.2 percentage point, P/E 33.7 +.3
  
• Bloomberg US Financial Conditions Index .79 +7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 2.23 +60.0 basis points
  
• US Yield Curve 29.0 basis points (2s/10s) -5.0 basis points
  
• US Atlanta Fed Q4 GDPNow Forecast +2.99% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 24.6% -1.2 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.83% unch.: CPI YoY +2.82% unch.
  
• 10-Year TIPS Spread 2.40 -2.0 basis points
  
• Highest target rate probability for March 19th FOMC meeting: 73.6% (+1.2 percentage points) chance of 4.25%-4.5%. Highest target rate probability for May 7th meeting: 57.2%(+.9 percentage point) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +280 open in Japan 
• China A50 Futures: Indicating -89 open in China

• DAX Futures: Indicating +192 open in Germany

Portfolio:

• Higher: On gains in my industrial/financial/tech/utility/consumer discretionary sector longs
• Disclosed Trades: None
  
• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.7%
  

Sector Underperformers:

• 1) Alt Energy -1.3% 2) Homebuilding -1.2% 3) Energy -1.0%

Stocks Falling on Unusual Volume: 

• GPRK, LEN, KEY, XP, MMYT, PRCT, CLMT, EDU and FTAI
  

Stocks With Unusual Put Option Activity:

• 1) XP 2) TEM 3) WMB 4) BHC 5) JNPR
  

Stocks With Most Negative News Mentions:

• 1) FTAI 2) WBA 3) EDU 4) KEY 5) GOEV
  

Sector ETFs With Most Negative Money Flow:

• 1) AIRR 2) XLE 3) IGV 4) ARKK 5) XLB

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.1%
  

Sector Outperformers:

• 1) Networking +4.1% 2) Disk Drives +3.6% 3) Digital Health +3.2%

Stocks Rising on Unusual Volume:

• RDW, RGTI, VSAT, TEM, EOLS, RKLB, HG, CLPT, NNE, LUNR, REPL, SMMT, CBRL, BTSG, ORKA, VST, OPFI, EDN, CEPU, WSC, ORCL, LB, ARQQ, SCHW, NVMI, KROS, DSP, SEMR, AB, MLTX, ERJ, ETON, BMEZ, DG, EXLS, CAMT, ALC, KTOS, BCS, CLS, RYTM, MMM, MCY, FUTU, MUFG, STX, CDRE, AGYS, CNH, NGG, LOGI and PAM
  

Stocks With Unusual Call Option Activity:

• 1) FEZ 2) TEM 3) RDW 4) WMB 5) D

Stocks With Most Positive News Mentions:

• 1) TEM 2) EOLS 3) GH 4) JNVR 5) INUV
  

Sector ETFs With Most Positive Money Flow:

• 1) XLI 2) SMH 3) PAVE 4) VFH 5) MAGS
  

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:

• (ABT)/1.34
• (ALLY)/.59
• (APH)/.50
• (CMA)/1.29
• (GEV)/2.30
• (HAL)/.69
• (JNJ)/2.01
• (PG)/1.86
• (TEL)/1.89
• (TDY)/5.23
• (TXT)/1.28
• (TRV)/6.65
  

After the Close: 

• (AA)/.94
• (DFS)/3.61
• (KMI)/.34
• (KNX)/.33
• (SLG)/1.44
• (STLD)/1.32
• (BOOT)/2.29
• (CCI)/1.81
• (LVS)/.59
• (SF)/1.97
  

Economic Releases

10:00 am EST

• The Leading Index for Dec. is estimated to fall -.1% versus a +.3% gain in Nov.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The 20Y T-Bond auction, weekly US retail sales reports, weekly MBA Mortgage Applications report and the weekly API weekly crude oil stock report could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +26.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.4 +3.5
  
• 1 Sector Declining, 10 Sectors Rising
• 78.7% of Issues Advancing, 19.8% Declining 
• TRIN/Arms 1.37 +3.7%
  
• Non-Block Money Flow +$234.1M
  
• 146 New 52-Week Highs, 15 New Lows
• 57.0% (+4.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 64.5 +5.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 72.3 -1.5%
• Bloomberg Cyclicals/Defensives Index 257.1 -.3%
  
• Russell 1000: Growth/Value 21,256.6 +.5%
• CNN Fear & Greed Index 42.0 (FEAR) +4.0
  
• 1-Day Vix 10.2 -3.6%
  
• Vix 15.1 -4.2%
  
• Total Put/Call .73 +1.4%