Stocks Rising into Final Hour on Dissipation of Overblown AI Infrastructure Fears, Stable Long-Term Rates, Earnings Outlook Optimism, Tech/Consumer Discretionary Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.14 -.11%
• 3-Month T-Bill Yield 4.29% unch.
  

• China Iron Ore Spot 103.5 USD/Metric Tonne -.12%
• Dutch TTF Nat Gas(European benchmark) 48.2 euros/megawatt-hour +.8%

• Citi US Economic Surprise Index 8.0 -1.6 points
  

• Citi Eurozone Economic Surprise Index -2.7 +1.3 points

• Citi Emerging Markets Economic Surprise Index 7.2 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(94 of 500 reporting) +11.1% -4.9 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.78 -.06:  Growth Rate +15.4% unch., P/E 22.0 +.4
  
• S&P 500 Current Year Estimated Profit Margin 12.25% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +97.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 399.94 +.29: Growth Rate +27.9% +.1 percentage point, P/E 34.3 +.9
  
• Bloomberg US Financial Conditions Index .71 -17.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.66 -17.0 basis points
  
• US Yield Curve 34.0 basis points (2s/10s) +.75 basis point
  
• US Atlanta Fed Q4 GDPNow Forecast +3.18% +19.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.8% -1.2 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.83% unch.: CPI YoY +2.85% +1.0 basis point
  
• 10-Year TIPS Spread 2.41 +1.0 basis point
  
• Highest target rate probability for March 19th FOMC meeting: 69.6% (+3.4 percentage points) chance of 4.25%-4.5%. Highest target rate probability for May 7th meeting: 49.8%(+1.4 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +462 open in Japan 
• China A50 Futures: Indicating +49 open in China

• DAX Futures: Indicating +190 open in Germany

Portfolio:

• Higher: On gains in my utility/tech/industrial/financial/consumer discretionary sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  
• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.6%
  

Sector Underperformers:

• 1) Airlines -3.0% 2) Homebuilding -1.7% 3) Oil Service -1.6%

Stocks Falling on Unusual Volume: 

• AKRO, PAM, SCCO, IRM, JNPR, SYY, GMAB, HPE, MCY, PII, LMT, GM, BE and NEP
  

Stocks With Unusual Put Option Activity:

• 1) CVLT 2) JBLU 3) DUK 4) AM 5) BE
  

Stocks With Most Negative News Mentions:

• 1) JBLU 2) GM 3) PII 4) XRX 5) LMT
  

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) XLU 3) XLB 4) IYF 5) IYC

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.0%
  

Sector Outperformers:

• 1) Software +2.6% 2) Internet +2.1% 3) Cyber Security +2.0%

Stocks Rising on Unusual Volume:

• PSIX, SGRY, BHF, RCL, CR, OPFI, ESTC, NBIS, AMPL, PATH, CFLT, NET, SHOP, GOOS, CUK, CRWD, CCL, NCLH, IVZ, FRSH, SJW, NVDA, CLS, MDB, BKSY, HUBS, TAL, HNRG, CIB, DOCN, PEGA, ETON, CIEN, CRM, BCAX, TLN, VST, LITE, GLBE, ORCL, ADNT, CARG, BCAX, TSM, ALAB, SANM, RGEN, NUE, GLW, ANET, WIX, RTX and BA
  

Stocks With Unusual Call Option Activity:

• 1) LXRX 2) VNET 3) DT 4) ARVN 5) DDOG

Stocks With Most Positive News Mentions:

• 1) SGRY 2) CR 3) ZKIN 4) RCL 5) BHF
  

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLK 3) SOXX 4) IGV 5) XLI
  

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:

• (ASML)/7.04
• (ADP)/2.29
• (EAT)/1.86
• (GLW)/.56
• (DHR)/2.16
• (EXP)/3.91
• (FLEX)/.63
• (GD)/4.07
• (GPI)/9.11
• (HES)/1.49
• (MNRO)/1.29
• (NDAQ)/.75
• (NSC)/2.94
• (SMG)/-1.23
• (SF)/1.97
• (UBS)/.29
• (VFC)/.34
  

After the Close: 

• (AEM)/1.19
• (CHRW)/1.11
• (CP)/1.24
• (ETD)/.61
• (IBM)/3.78
• (LRCX)/.88
• (LVS)/.58
• (MTH)/2.24
• (META)/6.76
• (MSFT)/3.11
• (RJF)/2.68
• (RHI)/.55
• (NOW)/3.65
• (TER)/.91
• (TSLA)/.77
• (URI)/11.70
• (WDC)/1.78 
• (WHR)/4.31
• (BABA)/19.42
• (QCOM)/2.98
  

Economic Releases

8:30 am EST

• Advance Goods Trade Deficit for Dec. is estimated at -$105.5B versus -$102.9B in Nov.
• Wholesale Inventories MoM for Dec. is estimated to rise +.2% versus a +.3% gain in Nov.
• Retail Inventories MoM for Dec. is estimated to rise +.2% versus a +.3% gain in Nov.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,072,200 barrels versus a -1,017,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +138,400 barrels versus a +2,332,000 barrel gain the prior week. Distillate inventories are estimated to fall by -2,264,400 barrels versus a -3,070,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.2% versus a -5.8% decline prior.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds target rate at 4.25-4.5%.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The FOMC press conference, Atlanta Fed GDPNow 4Q update, weekly MBA Mortgage Applications report and the (J) 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 +15.4% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.8 -.8
  
• 7 Sectors Declining, 4 Sectors Rising
• 36.2% of Issues Advancing, 61.4% Declining 
• TRIN/Arms .91 -7.1%
  
• Non-Block Money Flow +$70.6M
  
• 93 New 52-Week Highs, 23 New Lows
• 55.6% (-1.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.6 +.6
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 71.5 +.1%
• Bloomberg Cyclicals/Defensives Index 259.0 +1.2%
  
• Russell 1000: Growth/Value 21,285.6 +2.5%
• CNN Fear & Greed Index 44.0 (FEAR) +5.0
  
• 1-Day Vix 11.7 -20.7%
  
• Vix 16.6 -7.4%
  
• Total Put/Call .75 -15.7%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 75.25 +.75 basis point.

• China Sovereign CDS 56.0 +.75 basis point.
  
• China Iron Ore Spot 103.3 USD/Metric Tonne -.4%

• Bloomberg Emerging Markets Currency Index 37.1 -.11%.
• Bloomberg Global Risk-On/Risk Off Index 71.5 +.07%.
• Volatility Index(VIX) futures 17.5 -.6%.
• Euro Stoxx 50 futures +.37%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.28%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.