Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 75.0 +.5 basis point.

• China Sovereign CDS 56.5 +.25 basis point.
  
• China Iron Ore Spot 104.5 USD/Metric Tonne +.9%

• Bloomberg Emerging Markets Currency Index 37.1 unch.
• Bloomberg Global Risk-On/Risk Off Index 73.5 +.12%.
• Volatility Index(VIX) futures 16.8 +.34%.
• Euro Stoxx 50 futures -.29%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.2%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down commodity by consumer and industrial 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 Final Hour on Trump Policy Initiatives, Earnings Outlook Optimism, Technical Buying, Tech/Construction Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.12 +.24%
• 3-Month T-Bill Yield 4.32% +2.0 basis points
  

• China Iron Ore Spot 104.2 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 48.7 euros/megawatt-hour -2.6%

• Citi US Economic Surprise Index 19.8 -.8 point
  

• Citi Eurozone Economic Surprise Index -24.6 -.4 point

• Citi Emerging Markets Economic Surprise Index 8.1 -.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(60 of 500 reporting) +18.5% -1.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.21 -.07:  Growth Rate +15.0% -.1 percentage point, P/E 22.2 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.27% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +97.6% n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 397.19 +.24: Growth Rate +26.7% +.1 percentage point, P/E 34.9 +1.2
  
• Bloomberg US Financial Conditions Index .83 +4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.75 -48.0 basis points
  
• US Yield Curve 30.0 basis points (2s/10s) +1.0 basis point
  
• US Atlanta Fed Q4 GDPNow Forecast +2.99% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 24.4% -.2 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.83% unch.: CPI YoY +2.84% +2.0 basis points
  
• 10-Year TIPS Spread 2.41 +1.0 basis point
  
• Highest target rate probability for March 19th FOMC meeting: 75.6% (+1.2 percentage points) chance of 4.25%-4.5%. Highest target rate probability for May 7th meeting: 58.2%(+1.4 percentage points) 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 +16 open in China

• DAX Futures: Indicating +130 open in Germany

Portfolio:

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

Bear Radar

Style Underperformer:

• Small-Cap Value -.7%
  

Sector Underperformers:

• 1) Oil Service -1.9% 2) Alt Energy -1.5% 3) REITs -1.4%

Stocks Falling on Unusual Volume: 

• HWC, SG, CHX, IRON, LAND, LNG, RDW, PRGS, VSAT, GDS, PDX, WK and AGYS
  

Stocks With Unusual Put Option Activity:

• 1) WMB 2) TEM 3) STX 4) CPNG 5) MLCO
  

Stocks With Most Negative News Mentions:

• 1) AGYS 2) TXT 3) AEHR 4) CELH 5) CMA
  

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) KBWB 3) KRE 4) OIH 5) VHT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.6%
  

Sector Outperformers:

• 1) Software +3.1% 2) Disk Drives +3.1% 3) Computer Hardware +2.4%

Stocks Rising on Unusual Volume:

• GRAL, PDYN, TSSI, SDGR, ARM, PSIX, NNE, SEI, NFLX, SOC, CRNC, FTAI, SMMT, MRNA, IBKR, ORCL, RDNT, STX, CCJ, APH, NBIS, VICR, HIMX, TDY, CRSP, EOLS, GH, SPIR, GLW, CLS, DELL, TRV, ALLY, AMX, TEM, BKV, BKV, COF, QTRX and HDB
  

Stocks With Unusual Call Option Activity:

• 1) PBR/A 2) SOC 3) GLW 4) HIMX 5) TEM

Stocks With Most Positive News Mentions:

• 1) ARM 2) IPA 3) NFLX 4) IBKR 5) STX
  

Sector ETFs With Most Positive Money Flow:

• 1) XLI 2) SMH 3) XLV 4) XLF 5) XLB
  

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:

• (ALK)/.47
• (AAL)/.66
• (ELV)/3.82
• (FCX)/.22
• (GE)/1.04
• (MKC)/.77
• (UNP)/2.79
  

After the Close: 

• (CSX)/.42
• (ISRG)/1.79
• (TXN)/1.20
• (MRTN)/.06
  

Economic Releases

10:00 am EST

• Initial Jobless Claims for last week is estimated to rise to 220K versus 217K the prior week.
• Continuing Claims is estimated to rise to 1866K versus 1859K prior.
  

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for Jan. is estimated to rise to 0 versus -4 in Dec.
  

12:00 pm EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -830,000 barrels versus a -1,962,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,295,000 barrels versus a +5,852,000 barrel gain the prior week. Distillate inventories are estimated to rise by +263,330 barrels versus a +3,077,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -1.1% versus a -1.6% decline prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The President Trump speech, 10Y TIPS auction, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, (JBL) annual meeting, (COST) annual meeting, (INTU) annual meeting, (TWLO) investor day and the (APD) 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 +13.6% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.6 +.2
  
• 7 Sectors Declining, 4 Sectors Rising
• 33.3% of Issues Advancing, 64.5% Declining 
• TRIN/Arms .93 -35.4%
  
• Non-Block Money Flow -$136.1M
  
• 127 New 52-Week Highs, 22 New Lows
• 56.2% (-1.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.3 -1.2
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 73.8 +1.4%
• Bloomberg Cyclicals/Defensives Index 259.7 +.9%
  
• Russell 1000: Growth/Value 21,597.7 +2.2%
• CNN Fear & Greed Index 45.0 (NEUTRAL) +3.0
  
• 1-Day Vix 9.0 -14.6%
  
• Vix 15.3 +1.3%
  
• Total Put/Call .73 -2.7%