Stocks Modestly Lower into Final Hour on Prolonged Mideast War Fears, Mideast Energy Infrastructure Damage, Global Supply Chain Disruption Worries, Metals & Mining/Homebuilding Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 60.8 +.5%
• BofA Private Credit Proxy Index 71.7 -.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 +3.0 basis points
• BofA Global Financial Stress Indicator .26 +1.0 basis point
• European Financial Sector CDS Index 68.2 +3.5%
• Emerging Market CDS Index 150.7 +.4%
• Israel Sovereign CDS 78.7 -1.3% 
• Bloomberg Global Trade Policy Uncertainty Index 1.0 +.1
• US Morning Consult Daily Consume Sentiment Index 91.7 +1.7 

• Citi US Economic Surprise Index 29.2 +1.4

• Citi Eurozone Economic Surprise Index -9.0 unch.

• Citi Emerging Markets Economic Surprise Index 53.3 -.9 point
• S&P 500 Current Quarter EPS Growth Rate YoY(8 of 500 reporting) +112.1% +101.2 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 328.0 +.81:  Growth Rate +18.1% +.3 percentage point, P/E 20.1 -.3
• S&P 500 Current Year Estimated Profit Margin 14.81% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 528.83 +1.64: Growth Rate +32.9% +.4 percentage point, P/E 27.4 -.5
• Bloomberg US Financial Conditions Index .23 -10.0 basis points
• US Yield Curve 43.75 basis points (2s/10s) -7.0 basis points 
• Bloomberg Industrial Metal Index 163.0 -2.6%
• Dutch TTF Nat Gas(European benchmark) 61.9 euros/megawatt-hour +13.2% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 19.9% -3.3 percentage points
• US Atlanta Fed GDPNow Q1 Forecast +2.3% -.4 percentage point
• US 10-Year T-Note Yield 4.28% +2.0 basis points
• 1-Year TIPS Spread 5.19 +13.0 basis points

• Highest target rate probability for June 17th FOMC meeting: 95.7% (+7.9 percentage point) chance of 3.5%-3.75%. Highest target rate probability for July 29th meeting: 92.1%(+14.7 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1,027 open in Japan 
• China A50 Futures: Indicating -100 open in China

• DAX Futures: Indicating -63 open in Germany

Portfolio:

• Higher: On gains in my tech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 25% net long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.9%

Sector Underperformers:

• 1) Gold & Silver -7.2% 2) Nuclear -2.4% 3) Homebuilding -2.0%

Stocks Falling on Unusual Volume: 

• BIRK, WSC, EH, GE, NXE, WSC, MGA, OCS, KNF, FNF, FUTU, KYIV, MT, DT, QDEL, MHK, FCX, FAF, LAND, LGIH, QDEL, PHYS, ALM, STAA, DSP, MOS, SCCO, LTBR, COCO, CSTM, GFI, CEF, LIF, CMP, CRCL, CGAU, SKE, PSLV, DRD, OR, WPM, BABA, CDE, B, KNSL, KGC, AEM, SUNB, AGI, IAG, ORLA, HMY, PPTA, MUX, EQPT, TFPM, ARIS, SSRM, PAAS, BVN, EGO, AG, RGLD, IE, MP, NEM, EQX, SA, LB, AU, SBSW, AGMB, ELE, AA, AUGO, CENX, HYMC, RCAT, PICS and CSIQ

Stocks With Unusual Put Option Activity:

• 1) NEXT 2) NYT 3) EXE 4) YPF 5) DB

Stocks With Most Negative News Mentions:

• 1) CSIQ 2) NEM 3) BABA 4) DXLG 5) SMR

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) XRT 3) XLE 4) KRE 5) IYJ

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -.5%

Sector Outperformers:

• 1) Coal +4.5% 2) Oil Service +1.8% 3) Energy +1.3%

Stocks Rising on Unusual Volume:

• VET, SPIR, TWO, TSEM, SIG, AXTI, FIVE, DLO, BTU, ELVN, WDS, DEC, MEOH, CNR, LITE, AAOI, METC, LNG, EQNR, AGRO, PTGX, COHR, ARLP, FLNG, BWLP, ARLP, RRC, PARR, KSS, GPOR, ETON, AR, ACN, SLB, YPF, CVE, APA, SSL, COLL, E, EXE, CRESY, VIST, CRK, OSIS, EQT, BETA, CNQ, TTE, NOG, GPRK and SMTC

Stocks With Unusual Call Option Activity:

• 1) NEXT 2) BF/B 3) LBTYA 4) TTE 5) CLX 

Stocks With Most Positive News Mentions:

• 1) SER 2) SIG 3) ELA 4) GOAI 5) CAL

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) XAR 3) IFRA 4) RSPT 5) XOP

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:

• None of note

After the Close: 

• None of note

Economic Releases 

• None of note 

Upcoming Splits

• None of note

Other Potential Market Movers

• The US Baker Hughes oil rig count, weekly CFTC speculative net positioning reports and the (WBD) shareholders 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 +16.4% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.9 -4.9
• 10 Sectors Declining, 1 Sector Rising
• 35.9% of Issues Advancing, 62.2% Declining 
• TRIN/Arms .63 -37.0%
• Non-Block Money Flow -$256.7M
  
• 65 New 52-Week Highs, 145 New Lows
• 46.2% (-2.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 31.3 -9.3

Polymarket: 

• How long will the DHS shutdown last? 60+ days 50.0% +5.0 percentage points
• Will China invade Taiwan by end of 2026? 10.0% -1.0 percentage point
• US forces enter Iran by April 30th 61.0% +20.0 percentage points
• Trump announces end of military operations against Iran by April 30th 53.0% -1.0 percentage point

Other:

• Bloomberg Global Risk-On/Risk-Off Index 102.1 +.3%
• Global Monitor Iran Instability Index 100.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 95.0% unch.
• US High-Yield Tech Sector OAS Index 543.5 +11.25 basis points
• Bloomberg Cyclicals/Defensives Index 244.7 -.5%
• Morgan Stanley Growth vs Value Index 141.3 -.8%
• CNN Fear & Greed Index 17.0 (EXTREME FEAR) -3.0
• 1-Day Vix 15.9 -28.0%
  
• Vix 25.2 +.4%
  
• Total Put/Call .83 -21.7%

Thursday Watch

Night Trading 

• Asian equity indices are -2.5% to -1.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 78.5 +2.0 basis points.
• China Sovereign CDS 48.25 +2.0 basis points.
• China Iron Ore Spot 107.35 USD/Metric Tonne +.04%. 
• Crude Oil 99.20/bbl. +2.9% 
• Gold 4,853.0 USD/t oz. -.9%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.71 -.1%.
• Bloomberg Emerging Markets Currency Index 35.37 -.1%.
• Bloomberg Global Risk-On/Risk Off Index 100.7 -1.1%
• US 10-Year Yield 4.28% +1.0 basis point.
• Japan 30-Year Yield 3.52% +2.0 basis points. 
• Volatility Index(VIX) futures 24.9 +1.0%.
• Euro Stoxx 50 futures -1.6%. 
• S&P 500 futures -.13%.
• NASDAQ 100 futures -.16%.

Morning Preview Links

BOTTOM LINE: Asian indices are lower, weighed down by financial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is Market Neutral heading into the day.