Wednesday Watch

Night Trading 

• Asian equity indices are +1.75% to +3.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 78.0 -7.75 basis points.
• China Sovereign CDS 50.0 -1.25 basis points
• China Iron Ore Spot 105.6 USD/Metric Tonne -1.0%. 
• Crude Oil 96.5/bbl. -14.5% 
• Gold 4,854.5 USD/t oz. +3.4%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.64 +.56%.
• Bloomberg Emerging Markets Currency Index 35.58 +.33%.
• Bloomberg Global Risk-On/Risk Off Index 103.2 -.5%
• US 10-Year Yield 4.26% -4.0 basis points.
• Japan 30-Year Yield 3.60% -16.0 basis points. 
• Volatility Index(VIX) futures 22.1 -8.0%.
• Euro Stoxx 50 futures +4.75%. 
• S&P 500 futures +2.25%.
• NASDAQ 100 futures +3.0%.

Morning Preview Links

BOTTOM LINE: Asian indices are sharply higher, boosted by technology and transport shares in the region. I expect US stocks to open sharply higher and to maintain gains into the afternoon.  The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Protracted Mideast War Fears, Global Supply Chain Disruption Worries, Technical Selling, Alt Energy/Homebuilding Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 61.2 +3.3%
• BofA Private Credit Proxy Index 72.5 -.7% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 unch.
• BofA Global Financial Stress Indicator .31 -3.0 basis points
• European Financial Sector CDS Index 72.0 +.8%
• Emerging Market CDS Index 187.4 +1.0%
• Israel Sovereign CDS 79.1 +.6% 
• Bloomberg Global Trade Policy Uncertainty Index .8 unch.
• US Morning Consult Daily Consume Sentiment Index 87.5 -.5

• Citi US Economic Surprise Index 29.0 -.7

• Citi Eurozone Economic Surprise Index -14.4 -4.4

• Citi Emerging Markets Economic Surprise Index 42.4 -2.9 
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +85.6% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 337.01 +.20:  Growth Rate +21.4% +.1 percentage point, P/E 19.5 -.1
• S&P 500 Current Year Estimated Profit Margin 15.07% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +690.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 797.88 +1.64: Growth Rate +101.0% +.5 percentage point, P/E 17.8 unch. 
• Bloomberg US Financial Conditions Index .50 +4.0 basis points
• US Yield Curve 50.5 basis points (2s/10s) +2.0 basis points
• Bloomberg Industrial Metal Index 169.5 -.1%
• Dutch TTF Nat Gas(European benchmark) 53.2 euros/megawatt-hour +6.4% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 18.5% unch.
• US Atlanta Fed GDPNow Q1 Forecast +1.3% -.3 percentage point
• US 10-Year T-Note Yield 4.32% -1.0 basis point
• 1-Year TIPS Spread 5.38 +5.0 basis points

• Highest target rate probability for June 17th FOMC meeting: 91.9% (-3.0 percentage points) chance of 3.5%-3.75%. Highest target rate probability for July 29th meeting: 89.9%(-3.1 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +116 open in Japan 
• China A50 Futures: Indicating -90 open in China

• DAX Futures: Indicating +346 open in Germany

Portfolio:

• Higher: On gains in my tech sector longs, index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.9%

Sector Underperformers:

• 1) Homebuilding -2.4% 2) Alt Energy -2.3% 3) Airlines -2.0%

Stocks Falling on Unusual Volume: 

• UAL, VIK, NKE, DSGN, AEHR, RH, KMB, ONON, STRL, MBX, FND, TMHC, ENPH, LE, NNE, MESO, MNR, GCT, AXON and PLSE

Stocks With Unusual Put Option Activity:

• 1) PSKY 2) TSCO 3) SIDU 4) RXRX 5) VRDN

Stocks With Most Negative News Mentions:

• 1) INO 2) ALIT 3) EOSE 4) SMR 5) IBRX

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) KRE 3) XLV 4) XRT 5) IYE

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.1%

Sector Outperformers:

• 1) Healthcare Providers +4.1% 2) Networking +1.4% 3) Oil Service +1.0%

Stocks Rising on Unusual Volume:

• ALHC, CAR, UNH, PSKY, SLVN, HUM, SSL, BETR, AAOI, BKSY, CVS, FRPT, REPX, RLAY, AXTI, ORKA, AORT, VITL, NRIX, MEOH, BCAX, TNC, NWE, BKH and INTC

Stocks With Unusual Call Option Activity:

• 1) PSKY 2) XHB 3) PTEN 4) HTZ 5) PRMW 

Stocks With Most Positive News Mentions:

• 1) UNH 2) ALHC 3) SILO 4) AVGO 5) HUM

Sector ETFs With Most Positive Money Flow:

• 1) IGV 2) XLE 3) XLU 4) SOXX 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:

• (DAL)/.59
• (RPM)/.35 

After the Close: 

• (APLD)/-.15
• (STZ)/1.71
• (PSMT)/1.57 

Economic Releases 

10:30 am EST 

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +713,000 barrels versus a +5,451,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,272,670 barrels versus a -586,000 barrel decline the prior week. Distillate inventories are estimated to fall by -597,330 barrels versus a -2,111,000 barrel decline prior. Finally, Refinery Utilization is estimated to rise by +.95% versus a -.8% decline prior. 

2:00 pm EST

• FOMC Meeting Minutes for March 18th. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Waller speaking, 10Y T-Note auction, weekly MBA Mortgage Applications report, Thomson Reuters IPSOS PCSI for April, (FDX) investor day, (LEN) annual meeting, (DKS) investor meeting, (PLAB) annual meeting and the JPMorgan Retail Round-Up forum 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 -15.9% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 20.1 +5.0
• 3 Sectors Rising, 8 Sectors Declining
• 39.1% of Issues Advancing, 59.1% Declining 
• TRIN/Arms 1.17 -6.4%
• Non-Block Money Flow -$239.0M
  
• 40 New 52-Week Highs, 31 New Lows
• 48.0% (-.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.9 -.7

Polymarket: 

• How long will the DHS shutdown last? 70+ days 61.0% +16.0 percentage points
• Will China invade Taiwan by end of 2026? 9.0% unch.
• US Invades Iran before 2027 60.0% +3.0 percentage points
• US x Iran ceasefire by April 30th 34% +6.0 percentage points 
• Trump announces end of military operations against Iran by April 30th 38.0% +5.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 104.2 -.5%
• Global Monitor Iran Instability Index 100.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 92.0% unch.
• US High-Yield Tech Sector OAS Index 518.25 +6.25 basis points
• Bloomberg Cyclicals/Defensives Index 247.2 -.3%
• Morgan Stanley Growth vs Value Index 134.7 -.2%
• CNN Fear & Greed Index 22.0 (EXTREME FEAR) +1.0
• 1-Day Vix 23.1 +27.8%
  
• Vix 26.2 +8.7%
  
• Total Put/Call .94 -2.1%