Stocks Reversing Lower into Afternoon on Prolonged Mideast War Fears, Global Supply Chain Disruption Worries, Rising Long-Term Rates

Overseas Futures:

• Nikkei 225 Futures: Indicating -530 open in Japan 
• China A50 Futures: Indicating +5 open in China

• DAX Futures: Indicating +11 open in Germany

Portfolio:

• Higher: On gains in my tech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to Market Neutral

Monday's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (DLTR)/2.53 

After the Close: 

• (SMTC)/.03
• (GETY)/.03 

Economic Release 

8:30 am EST

• Empire Manufacturing for March is estimated to fall to 3.9 versus 7.1 in Feb. 

9:15 am EST

• Industrial Production MoM for Feb. is estimated to rise +.1% versus a +.7% gain in Jan.
• Manufacturing Production for Feb. is estimated to rise +.2% versus a +.6% gain in Jan.
• Capacity Utilization for Feb. is estimated at 76.2% versus 76.2% in Jan. 

10:00 am EST

• The NAHB Housing Market Index for March is estimated to rise to 37 versus 36 in Feb. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Dallas Fed PCE for Feb., JPMorgan Industrials Conference, BNP Paribas Transforming Industrials Conference Oppenheimer MedTech/Services Conference, (NWSA) investor meeting, (OKTA) investor meeting and the UBS Energy/Utilities Conference could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Friday Watch

Night Trading 

• Asian equity indices are -1.0% to unch. on average. 
• Asia Ex-Japan Investment Grade CDS Index 80.0 unch.
• China Sovereign CDS 47.75 -.5 basis point.
• China Iron Ore Spot 108.2 USD/Metric Tonne +.33%. 
• Crude Oil 95.48/bbl. -.25% 
• Gold 5,128.3 USD/t oz. +.04%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.76 -.07%.
• Bloomberg Emerging Markets Currency Index 35.58 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 96.2 -1.7%.
• US 10-Year Yield 4.26% unch.
• Japan 30-Year Yield 3.50% +1.0 basis point. 
• Volatility Index(VIX) futures 23.9 -2.1%.
• Euro Stoxx 50 futures +.24%. 
• S&P 500 futures +.42%.
• NASDAQ 100 futures +.36%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.

Stocks Falling into Final Hour on Protracted Mideast War Fears, Global Supply Chain Disruption Worries, Rising Inflation Expectations, Transport/Financial Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 59.6 +4.1%
• BofA Private Credit Proxy Index 71.2 -1.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 +2.0 basis points
• BofA Global Financial Stress Indicator .24 +2.0 basis points
• European Financial Sector CDS Index 66.9 +4.5%
• Emerging Market CDS Index 144.4 +4.2%
• Israel Sovereign CDS 81.2 +1.6% 
• Bloomberg Global Trade Policy Uncertainty Index .9 -.2

• Citi US Economic Surprise Index 32.0 +2.6

• Citi Eurozone Economic Surprise Index 9.70 unch.

• Citi Emerging Markets Economic Surprise Index 37.6 +.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) +13.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 325.13 +.20:  Growth Rate +17.1% +.1 percentage point, P/E 20.6 -.2
• S&P 500 Current Year Estimated Profit Margin 14.78% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +28.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 525.10 +.39: Growth Rate +32.0% +.1 percentage point, P/E 28.4 -.1
• Bloomberg US Financial Conditions Index .33 +3.0 basis points
• US Yield Curve 50.25 basis points (2s/10s) -6.75 basis points 
• Bloomberg Industrial Metal Index 174.1 +.3%
• Dutch TTF Nat Gas(European benchmark) 50.9 euros/megawatt-hour +1.8% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.3% -.6 percentage point
• US Atlanta Fed GDPNow Q1 Forecast +2.7% +60.0 basis points
• US 10-Year T-Note Yield 4.26% +3.0 basis points
• 1-Year TIPS Spread 4.69 +23.0 basis points

• Highest target rate probability for April 29th FOMC meeting: 95.0% (+6.8 percentage points) chance of 3.5%-3.75%. Highest target rate probability for June 17th meeting: 77.8%(+15.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -680 open in Japan 
• China A50 Futures: Indicating -115 open in China

• DAX Futures: Indicating -5 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: Market Neutral

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.2%

Sector Underperformers:

• 1) Airlines -4.2% 2) Shipping -3.3% 3) Oil Service -3.0%

Stocks Falling on Unusual Volume: 

• XENE, FTK, IX, BWAY, BBW, PZZA, FICO, MAIN, BN, SAN, MCO, AAL, BX, BA, TEN, CPB, DHT, NVTS, BWLP, FTI, CMBT, UAL, SMFG, TSM, DG, ARES, DEO, RBRK, KKR, ALK, SYK, HLNE, BCH, BSAC, EVR, DNTH, LAZ, CIB, HMC, GFS, ISSC, ATI, CDRE, ARCB, AER, BCS, MELI, CGON, IPGP, CCL, FUTU, FWRD, LGND, FRO, INDV, DB, TRMD, PATH, CPA, NESR, WFRD, GPGI, ALOY, ALH, BETA, RELY, GRPN, KLAR, EMBJ, GIII, NVGS, KYIV, AAOI, FEIM, BW and AERO

Stocks With Unusual Put Option Activity:

• 1) DKS 2) GTLB 3) BIZD 4) SKM 5) LNG

Stocks With Most Negative News Mentions:

• 1) CRMT 2) NAVN 3) AWST 4) SMR 5) RR

Sector ETFs With Most Negative Money Flow:

• 1) KRE 2) XLF 3) XLK 4) IGV 5) XBI

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value -.8%

Sector Outperformers:

• 1) Utilities +2.0% 2) Coal +2.0% 3) Utilities +1.9%

Stocks Rising on Unusual Volume:

• HIMX, FLY, CE, CF, IPI, LXU, DSP, UMAC, MOS, BATL, MEOH, DOW, ASIX, LYB, NTR, DSGX, OLLI, IBTA, PARR, CVI, OXY, KR, LEU, ONDS, VELO, PSIX, PSX, XPEV, FMC, VG, PSNY, PUMP, AXTI, W and SSL

Stocks With Unusual Call Option Activity:

• 1) LWLG 2) RBRK 3) CORN 4) HIMX 5) BMBL 

Stocks With Most Positive News Mentions:

• 1) BMBL 2) MOS 3) ODD 4) GAMB 5) LWLG

Sector ETFs With Most Positive Money Flow:

• 1) PAVE 2) VDC 3) XLU 4) SHLD 5) XLP

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume