Stocks Rising into Final Hour on Earnings Outlooks, Yen Weakness, Technical Buying, Biotech/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.8 -6.5%

• Euro/Yen Carry Return Index 132.22 +.47%

• Emerging Markets Currency Volatility(VXY) 8.31 +.48%

• S&P 500 Implied Correlation 39.19 -2.8%

• ISE Sentiment Index 131.0 +31.0%
  

• Total Put/Call .90 -4.26%

• NYSE Arms 1.21 +6.14%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.15 -1.54%
  

• America Energy Sector High-Yield CDS Index 508.0 +.38%

• European Financial Sector CDS Index 75.72 +2.48%

• Italian/German 10Y Yld Spread 255.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 69.12 -1.46%
  

• Emerging Market CDS Index 167.96 +1.65%
  

• iBoxx Offshore RMB China Corporate High Yield Index 158.66 +.06%

• 2-Year Swap Spread 9.0 -.5 basis point

• TED Spread 20.0 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -10.25 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.97 -.36%
• 3-Month T-Bill Yield 2.43% unch.

• Yield Curve 19.75 -.5 basis point

• China Iron Ore Spot 84.0 USD/Metric Tonne +3.6%

• Citi US Economic Surprise Index -43.40 -13.6 points

• Citi Eurozone Economic Surprise Index -61.60 -2.8 points

• Citi Emerging Markets Economic Surprise Index -18.8 -4.7 points

• 10-Year TIPS Spread 1.96 +2.0 basis points
• 2.1% chance of Fed rate hike at May 1st meeting, 2.0% chance at June 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +143 open in Japan 
• China A50 Futures: Indicating +91 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

• Higher: On gains in my biotech/medical/tech/industrial/retail sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value +.3%

Sector Underperformers:

• 1) Gold & Silver -1.1% 2) Steel -1.1% 3) REITs -.7%

Stocks Falling on Unusual Volume: 

• NTNX, BNFT, WUBA, WES, UVE, DDD, ALRM, GMLP, WSR, CARG, EBIX, TSLA, SNH, WIFI, SQM, WDAY, ATSG, UPWK and NKTR

Stocks With Unusual Put Option Activity:

• 1) GPS 2) AET 3) IMGN 4) NTNX 5) DELL

Stocks With Most Negative News Mentions:

• 1) NTNX 2) XON 3) MAXR 4) WUBA 5) WBA

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.0%

Sector Outperformers:

• 1) Education +4.4% 2) Biotech +1.8% 3) Medical Equipment +1.6%

Stocks Rising on Unusual Volume:

• FNKO, FTCH, GPS, PBYI, HABT, VFF, ELAN, ZS, AMC, FL, XRAY, LLY, TGNA, SRCL, BIO, ASTE, CAI, GH, NVTR, PTLA, LYV, ACHC, SSP, SKY, BKNG, APLS, EDIT, FOLD, STAA, NTLA, BE, WTW, MAS, MTZ, LB, OSTK, TNDM, ICPT, EE, RDUS, SE, SKY, GTN, EB, NIO, SIEN, BPMC, PS, RUN, NLSN, VMW and SSTK

Stocks With Unusual Call Option Activity:

• 1) GPS 2) NLSN 3) NTNX 4) FL 5) SPLK

Stocks With Most Positive News Mentions:

• 1) PBYI 2) FTCH 3) GPS 4) ZS 5) VMW

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +16.6% Above 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 58.4% of Issues Advancing, 38.1% Declining
• 99 New 52-Week Highs, 8 New Lows
• 48.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.7%
• Vix 14.4 -2.9%
• Total Put/Call .88 -6.4%
• TRIN/Arms .95 -16.7%

Friday Watch

Evening Headlines

Bloomberg:    

• U.S. Readies Final China Trade Deal as Hawks Urge Caution.  

• North Korea’s Kim Vows to Meet Trump Again After Summit Collapse.

• Russia, China Veto UN Resolution Seeking Venezuela Elections.  

• Australian Property Slump Deepens as Credit Squeeze Hits Buyers.

• Stocks in Asia Rise as Yen Weakness Buoys Japan. Stocks in Asia notched up gains early Friday, with Japanese shares helped by overnight weakness in the yen. U.S. shares earlier edged lower amid a mixed set of economic signals. Treasury yields held on to gains. Japanese equities posted the bulk of gains ahead of the open in Hong Kong and China, where focus will be on MSCI Inc.’s announcement that it will boost the weight of domestic so-called A shares in its global benchmarks. The S&P 500 Index slipped as lingering concerns over trade and geopolitical risks dented sentiment, despite a report showing the U.S. economy cooled less than expected last quarter.“Stocks are pretty close to fair value,” Scott Wren, a senior global strategist at Wells Fargo Investment Institute Inc., told Bloomberg TV. “Now the story is the global growth concern and I would argue that is what the market is most worried about.” Japan’s Topix index rose 0.5 percent as of 9:05 a.m. in Tokyo. Futures on the S&P 500 Index were flat after the underlying gauge fell 0.3 percent Thursday. Australia’s S&P/ASX 200 Index rose 0.5 percent.

• Five Things You Need to Know to Start Your Day.  

• Trump Deal Looms, China's 11 Crucial Days, U.S. Growth: Eco Day.

Wall St. Journal:

• Why Facebook(FB) Still Seems to Spy on You.

• U.S., North Korea Trade Blame for Failed Summit.

• Chinese Shares Gain Global Sway Thanks to Index Firm’s Move.

• Some Uber, Lyft Drivers to Get Stock in IPOs.

Fox News:

• 2020 Dem presidential hopefuls introduce federal marijuana legalization bill.

• House Democrats' ‘Medicare-for-all’ bill would largely outlaw private insurance.

• Ben Carson issues stern warning amid abortion debate.

CNBC:

• Stocks making the biggest moves after hours: Gap, Tesla, Marriott and more.

• Gap(GPS) will split into two publicly traded companies; stock surges.

Zero Hedge:

• New US Peace Plan Would Remove All Troops From Afghanistan Within 5 Years: NYT.

• Tesla(TSLA) Tumbles As Musk "Mystery Announcement" Appears To Disappoint.

• Burning Aid: An Interventionist Deception on Colombia-Venezuela Bridge?

• Opposition Leader Calls On Justin Trudeau To Resign.

• South Korean FinMin "Closely Monitoring Markets" After Exports Collapse.

• 'The House' Just Hit A New Low.

• Best Year For Stocks Since 1987 Continues As Feb Economic Data Crashes Most In 2 Years.

Business Insider:

• More layoffs expected at Tesla(TSLA) as the company shutters most of its retail stores.

• HBO CEO Richard Plepler is leaving the company after nearly 28 years.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 70.0 +.25 basis point. 

• China Sovereign CDS 49.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 68.20 -.01%.

• FTSE 100 futures +.09%.

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.15%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (EBIX)/.96

• (FL)/1.40

• (SNH)/.34

• (STRA)/1.50

After the Close:

• None of note

Economic Releases
8:30 am EST

• Personal Income for Jan. is estimated to rise +.3%.

• Personal Spending for Dec. is estimated to fall -.3% versus a +.3% gain in Nov.

• PCE Core MoM for Dec. is estimated to rise +.2% versus a +.1% gain in Nov.

10:00 am EST

• ISM Manufacturing for Feb. is estimated to fall to 55.7 versus 56.6 in Jan.

• ISM Prices Paid for Feb. is estimated to rise to 51.8 versus 49.6 in Jan.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Caxin China PMI report, Eurozone Manufacturing PMI report and the (ETN) investor conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.